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On the uniform pricing puzzle in recorded music

Author

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  • Martin Richardson
  • Frank Stahler

Abstract

This paper proposes a possible explanation for uniform pricing in the recorded music industry, based on a pooling equilibrium across different quality types. We show that an ex ante ability to invest in the probability of success - which we identify with record companies' A&R expenditures - makes such a pooling equilibrium more likely.

Suggested Citation

  • Martin Richardson & Frank Stahler, 2013. "On the uniform pricing puzzle in recorded music," ANU Working Papers in Economics and Econometrics 2013-612, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2013-612
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp612.pdf
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    Cited by:

    1. Richardson, Martin & Stähler, Frank, 2016. "On the “uniform pricing puzzle” in recorded music," Information Economics and Policy, Elsevier, vol. 34(C), pages 58-66.
    2. Pascal Courty & Javad Nasiry, 2018. "Loss aversion and the uniform pricing puzzle for media and entertainment products," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(1), pages 105-140, July.

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    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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