Book value: Intertemporal pricing and quality discrimination in the US market for books
SourceInternational Journal of Industrial Organization
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Publishers produce books in hardcover and paperback versions with different prices and time of market introduction. Analysis of detailed book-level data reveals that (i) price-cost differentials cannot be explained by cost differences, making this an example of quality discrimination(ii) market introduction time strongly affects sales, suggesting that time is the crucial dimension of discriminationand (iii) there is substantial price rigidity across books and over time: prices depend on cost shifters but not on demand shifters. I discuss an explanation for this last finding in terms of the nature of demand in this market. © 2002 Elsevier Science B.V. All rights reserved.