The Agency and Wholesale Models in Electronic Content Markets

19 Pages Posted: 9 Aug 2012 Last revised: 21 Mar 2013

Justin P. Johnson

Cornell University - Samuel Curtis Johnson Graduate School of Management

Date Written: March 15, 2013

Abstract

I investigate strategic interactions and market outcomes in the "agency model" and "wholesale model" of sales. Adopting the agency model initially raises prices, and can (but need not) raise the profits of rival retailers. Nonetheless, consumers prefer the agency model. I relate my results to events in the market for electronic books.

Keywords: e-books, agency model, Amazon, Apple, delegation, antitrust

JEL Classification: K00, K2, L00, L4

Suggested Citation

Johnson, Justin P., The Agency and Wholesale Models in Electronic Content Markets (March 15, 2013). Available at SSRN: https://ssrn.com/abstract=2126808 or http://dx.doi.org/10.2139/ssrn.2126808

Justin P. Johnson (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

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