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Beyond the Dogma of the Fixed Book Price Agreement

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  • Frederick van der Ploeg

Abstract

After describing the essential features of the book market, a welfare analysis of the fixed book price agreement is given. Allowance is made for the opportunity cost of reading. Theoretically, the agreement pushes up book prices and depresses book sales. However, more titles will be published, particularly of books with low price elasticity and that take a long time to read. Potential advantages of better service, distribution and retail networks seem less relevant. The book market is one of imperfect competition, but even so the cross-subsidy argument is unlikely to be valid. A qualitative analysis of the Dutch situation is given. Tentative conclusions are that one should be more concerned about the number of well-stocked bookshops than the diversity of published titles and that debutantes do not face big barriers to entry. One should be even more concerned about the falling proportions of people reading books. Governments fail to set (quantitative) objectives for the fixed book price agreement, which makes it difficult to evaluate its success and contributes to it being treated as a dogma in the book world and the political arena.

Suggested Citation

  • Frederick van der Ploeg, 2003. "Beyond the Dogma of the Fixed Book Price Agreement," CESifo Working Paper Series 949, CESifo.
    • Handle: RePEc:ces:ceswps:_949
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    Cited by:

    1. Canoy, Marcel & van Ours, Jan C. & van der Ploeg, Frederick, 2006. "The Economics of Books," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 21, pages 721-761, Elsevier.
    2. Juan José Price Elton, 2016. "Racionalidad económica de la política cultural," Estudios Públicos, Centro de Estudios Públicos, vol. 0(144), pages 165-197.
    3. van der Ploeg, Frederick, 2006. "The Making of Cultural Policy: A European Perspective," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 34, pages 1183-1221, Elsevier.
    4. Alexandra Kontolaimou & Pródromos-Ioánnis Prodromídis & Ioanna Konstantakopoulou, 2019. "The issue of fixed book pricing: Evidence based on the Greek experience," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 13(2), pages 102-120, December.
    5. Gaffeo, Edoardo & Scorcu, Antonello E. & Vici, Laura, 2008. "Demand distribution dynamics in creative industries: The market for books in Italy," Information Economics and Policy, Elsevier, vol. 20(3), pages 257-268, September.
    6. Takahiro Endo, 2015. "Legal Structure, Business Organisations and Lobbying: The JapanesePublishing Sector, 1990-2001," Discussion Paper Series DP2015-19, Research Institute for Economics & Business Administration, Kobe University, revised Mar 2017.
    7. Michel Clement & Anke Hille & Bernd Lucke & Christina Schmidt-Stölting & Frank Sambeth, 2008. "Der Einfluss von Rankings auf den Absatz — Eine empirische Analyse der Wirkung von Bestsellerlisten und Rangpositionen auf den Erfolg von Büchern," Schmalenbach Journal of Business Research, Springer, vol. 60(8), pages 746-777, December.
    8. Perona, Mathieu, 2009. "Bookshop, blockbusters and readers’ tastes: a new appraisal of the fixed book price," MPRA Paper 17857, University Library of Munich, Germany.
    9. Silvi Berger & Morten Hviid, 2019. "Who Should Set Book Prices?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2019-07, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    10. Nataliya Kochkina & Evgeniya Popova, 2017. "Are Books Luxury Goods in Russia or not?," ACEI Working Paper Series AWP-06-2017, Association for Cultural Economics International, revised Jul 2017.
    11. Productivity Commission, 2009. "Restrictions on the Parallel Importation of Books," Research Reports, Productivity Commission, Government of Australia, number 34.
    12. repec:pra:mprapa:40306 is not listed on IDEAS
    13. Juan Jiménez & Javier Campos, 2010. "Modelling Competition in the Textbook Market: Some Lessons still to Learn," Journal of Industry, Competition and Trade, Springer, vol. 10(1), pages 71-85, March.
    14. Fernández Blanco, Víctor & Prieto Rodríguez,Juan, 2009. "Análisis de los hábitos de lectura como una decisión económica/," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 27, pages 113-138, Abril.
    15. Françoise Benhamou & Stéphanie Peltier, 2007. "How should cultural diversity be measured? An application using the French publishing industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(2), pages 85-107, June.

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    Keywords

    book market; fixed price agreement; opportunity cost of reading; diversity; accessibility; competition policy;
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