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When Old Meets New: Wholesale and Agency Models in the Market for Printed and Electronic Books

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Title:When Old Meets New: Wholesale and Agency Models in the Market for Printed and Electronic Books
Authors:Kim, Antino
Keywords:Strategy, Information, Technology, Economics, and Society (SITES)
agency, game theory, retailing, revenue-sharing, wholesale
Date Issued:03 Jan 2018
Abstract:In this work, I seek explanations to some of the curious phenomena reported in the book market by focusing on its two important characteristics: (i) the substitutability between the printed- and the e-book versions, and (ii) the mixture of the "old" wholesaling arrangement for printed-book versions and the "new" agency model for e-book versions. In this exploration, using a game theoretic model, I find that an increase in the agency fee that the retailer collects in the e-book market can depress the vitality of the market, which not only ends up hurting the publisher, but also the retailer. This raises a caution that retailers should be moderate in their efforts to get a bigger cut in the agency arrangement. I also find that some of the perplexing phenomena observed in the real world may be due to an excessively large agency fee in the e-book market, and that reducing this fee can lead to a win-win outcome for both the publisher and the retailer.
Pages/Duration:11 pages
URI:http://hdl.handle.net/10125/50535
ISBN:978-0-9981331-1-9
DOI:10.24251/HICSS.2018.646
Rights:Attribution-NonCommercial-NoDerivatives 4.0 International
https://creativecommons.org/licenses/by-nc-nd/4.0/
Appears in Collections: Strategy, Information, Technology, Economics, and Society (SITES)


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