Barnes & Noble claims elimination of agency pricing will increase prices

An article in the New York Times (June 8, 2012) describes the Justice department’s settlement with publishers to eliminate “agency pricing” which was claimed to enable collusion among publishers for ebook prices. Under agency pricing, five publishers were allowed by Apple to set their ebook prices and pay Apple 30%. The publishers had claimed that this prevented from dropping prices to uncompetitive levels for ebooks, thus stressing hardcover sales. Would elimnation of agency prices raise consumer prices because the supply chain would be less coordinated ? Does Barnes & Noble prefer agency pricing because it would decrease Amazon’s pricing competitiveness ? If the Justice department’s ruling decreases retail prices to make it uncompetitive for writers’to participate, will the supply chain be worse off ?

About aviyer2010

This entry was posted in Ecommerce, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

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