Fixed or free book prices: is a hybrid system superior?

One of the main issues in the literature on the economics of books is whether or not a fixed-price system is better than a free-price system in providing a wide variety of cheap books. Although numerous studies have been carried out, this issue remains unresolved. Since 1962 Norway has had a fixed-price system, regulated by a book trade agreement between the publishers’ and booksellers’ associations. On 1 May 2005, Bokavtalen, a new book trade agreement was introduced, representing a new step in a long-term trend towards a less regulated book trade, and the price system is now actually a hybrid of fixed and free prices. The evaluation is mainly based on extensive use of multivariate regression analyses. Some of the results suggest that the hybrid price system is superior to the old one with regard to each of price, sales, reading and number of titles.

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