Titel
Agency Model and Wholesale Pricing: Apple versus Amazon in the E-Book Market
Autor*in
Abstract
Apple’s choice of the agency model (i.e., Apple demands a share from the retail price set by the publishers) when entering the e-book market was surprising because: (i) the upstream firms can accrue all rents in a simultaneous move game if it determines the retail price; and (ii) the incumbent, Amazon, used wholesale pricing arrangements. This paper compares the two different contract types, pure and mixed: one retailer opts for wholesale, the other for the agency model. Departing from a standard and symmetric oligopolistic setup of Bertrand competing retailers and producers, the model accounts for retailers having (a) a significant contribution to the final value and (b) a strategic first-mover advantage. Both conditions combined are necessary (but not sufficient) in order to explain Apple’s choice and the possibility of an asymmetric equilibrium.
Stichwort
Upstream-DownstreamE-BooksAgency Model or Wholesale PricingPromotion by RetailersAsymmetric Outcome
Objekt-Typ
Sprache
Englisch [eng]
Persistent identifier
phaidra.univie.ac.at/o:719650
Erschienen in
Titel
International Journal of the Economics of Business
Seitenanfang
1
Seitenende
22
Publication
Informa UK Limited
Erscheinungsdatum
2017
Zugänglichkeit
Rechteangabe
© 2017 The Author(s)
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