The Agency and Wholesale Models in Electronic Content Markets
19 Pages Posted: 9 Aug 2012 Last revised: 21 Mar 2013
Date Written: March 15, 2013
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: Suggested Citation