2 options
Dynamic demand and pricing strategy in e-book market / Li, Hui.
- Format:
- Book
- Thesis/Dissertation
- Author/Creator:
- Li, Hui, author.
- Language:
- English
- Subjects (All):
- Commerce-Business.
- Marketing.
- Economics--Penn dissertations.
- Penn dissertations--Economics.
- Local Subjects:
- Commerce-Business.
- Marketing.
- Economics--Penn dissertations.
- Penn dissertations--Economics.
- Genre:
- Academic theses.
- Physical Description:
- 1 online resource (91 pages)
- Contained In:
- Dissertation Abstracts International 76-11A(E).
- Place of Publication:
- [Philadelphia, Pennsylvania]: University of Pennsylvania ; Ann Arbor : ProQuest Dissertations & Theses, 2015.
- Language Note:
- English
- System Details:
- Mode of access: World Wide Web.
- text file
- Summary:
- E-reading has experienced rapid growth in the past few years and has raised new questions. On the supply side, retailers such as Amazon jointly sell e-readers and e-books. It remains unclear how they can coordinate the two products to conduct intertemporal price discrimination (IPD). On the demand side, it remains unclear how much of e-book sales come from cannibalizing print books and how much serve as market expansion to the book business.
- I empirically address these questions using individual-level data from 2008 to 2012. I estimate a dynamic structural model of consumer e-reader adoption and subsequent book purchases, including quantity, reading format (e-book or print book), and retailer choices (Amazon, other online retailers, or offline bookstores) in a number of book genres. The estimation reveals two consumer types, avid readers and general readers, who self-select into buying e-readers based on their unobserved heterogeneous book tastes. Compared with general readers, avid readers buy more books, adopt e-readers earlier, and have larger cannibalization rates. The two types also have different relative demand elasticities between e-readers and e-books.
- Given the estimated demand system, I simulate the optimal dynamic pricing strategies of e-readers and e-books for the monopolist retailer Amazon who faces forward-looking consumers. I find that Amazon should harvest on e-readers and invest in e-books. Complementarity provides the firm a novel dimension of consumer heterogeneity (the relative demand elasticities between e-readers and e-books) to exploit. The joint IPD strategy provides a better screening device for more profitable consumers and limits consumer's ability to intertemporally arbitrage.
- To evaluate the impact of e-books on print book sales, I simulate the world without e-books and compare it with the observed one. I find that 42% of e-book sales come from cannibalizing print book sales and that 58% come from market expansion. Of the cannibalization effect, offline bookstores bear 53% of the cannibalization loss, while Amazon bears 32% and other online retailers bear 15%. I further explore how the impact of e-books would change under alternative pricing arrangements. Overall, the results have managerial implications to publishers, book retailers, and policymakers in the e-book market.
- Notes:
- Source: Dissertation Abstracts International, Volume: 76-11(E), Section: A.
- Advisors: Holger Sieg; Committee members: Eric T. Bradlow; Ulrich Doraszelski; Jean-Francois Houde; Xun Tang.
- Department: Economics.
- Ph.D. University of Pennsylvania 2015.
- Local Notes:
- School code: 0175
- ISBN:
- 9781321851311
- Access Restriction:
- Restricted for use by site license.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.