The Department of Economics invites you to a CBE Seminar with Tommaso Valletti, Imperial College London.
If you have any questions regarding the seminar, please contact the seminar organizers Krisztina Molnar or Camilla Nesfossen Hopsdal
Fixed book price (FBP) agreements are a form of resale price maintenance commonly applied to books in various countries. FBP restricts retail price competition with the aim of promoting book production variety. Yet, despite its popularity and application 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 model of demand that accounts for both effects, finding that consumers overall benefited from the regulation.