The economics of used books
In 2002, the Authors Guild and the Association of American Publishers sent an open letter to Jeff Bezos, the chief executive of Amazon.com, which has a market for used books in addition to selling new copies. “If your aggressive promotion of used book sales becomes popular among Amazon’s customers,” the letter said, “this service will cut significantly into sales of new titles, directly harming authors and publishers.”
But does it?
as the NYTimes goes on to say, it’s far more complicated than that, but, the Times argues:
All in all, it looks like the used book market creates a lot more value than it destroys.
And a large part of the reasoning behind this is the nature of the long tail.
The Times cites two studies concluding that markets for used books play positively into consumers’ purchasing decisions of new books:
- Internet Exchanges for Used Books: An Empirical Analysis of Product Cannibalization and Welfare Impact by Anindya Ghose of New York University and Michael D. Smith and Rahul Telang of Carnegie-Mellon.
- Are Durable Goods Consumers Forward Looking? Evidence from College Textbooks (pdf) by Judith Chevalier of the Yale School of Management and Austan Goolsbee at the Chicago Business School