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Cultural Exception? The Impact of Price Regulation on Prices and Variety in the Market for Books

Author

Listed:
  • Genakos, C.
  • Pagliero, M.
  • Sabatino, L.
  • Valletti, T.

Abstract

Fixed book price (FBP) agreements are a form of resale price maintenance applied to books in various countries. FBP restricts retail price competition with the aim of promoting book production variety. Yet, despite its popularity and adoption in many countries, there is no empirical evidence on its effects. We offer systematic evidence on the impact of FBP on book variety and prices using a detailed new dataset from Italy that includes the universe of books published and bought, before and after the introduction of FBP. Our results indicate that FBP raises prices without significantly affecting the number of new books published in the marketplace. However, it also increases considerably the variety of books actually bought, especially from independent bookstores. We estimate a structural demand model that accounts for both effects, finding that consumers overall benefit from the regulation.

Suggested Citation

  • Genakos, C. & Pagliero, M. & Sabatino, L. & Valletti, T., 2025. "Cultural Exception? The Impact of Price Regulation on Prices and Variety in the Market for Books," Cambridge Working Papers in Economics 2514, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2514
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    Keywords

    Cultural Goods; Resale Price Maintenance; Book Market; Ex-post Policy Evaluation;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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