Wednesday, April 10, 2002

Cripple the aftermarket Traditionally, book publishers price discriminate by releasing expensive hardbacks first, cheap paperbacks later, and inconvenient library access. Marginal cost is constant across all three segments. But Amazon (and eBay/ takes friction out of the aftermarket by making it easier to buy and sell second hand books, which reduces dead weight loss and transfers surplus from publishers to consumers. Publishers, of course, want this banned.


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