Title

A note on elasticity and price dispersions in the music recording industry

Document Type

Article

Publication Date

12-1-2000

Department

Marketing and Fashion Merchandising

Abstract

The present note examines price dispersions in the music recording industry between new release and mid-line (older) recordings. The model employs the framework developed within the industrial economics literature and provides empirical results suggesting that new release prices are lower than those of mid-level recordings. This result follows from differing buyer characteristics and varying levels of close substitutes, leading to higher demand elasticities for new release recordings. Finally, the theoretical expectations should hold in the presence of either significant scale economies or modest minimum efficient scales of production.

Publication Title

REVIEW OF INDUSTRIAL ORGANIZATION

Volume

17

Issue

4

First Page

465

Last Page

470