Authors: Prodromos Prodromidis

Title: Who benefits from the fixed book price amendment in Greece?

Abstract

In Greece, the book market operates under a limited fixed book price (FBP) law by which the publisher reserves the right to set the retail prices of literature books. Initially, a broad FBP law was passed in December of 1997. This was significantly diluted in April of 2014. The 2014-policy switch has caused strong reactions from publishers, calling for a return to the previous state. The paper explores the issue by setting up a Nash Bargaining Solution Model, which suggests that the FBP law allows publishers to better base their wholesale prices on factors that are under their control. It also engages in empirical analyses of domestic book prices and biliodiversity data to isolate trend, seasonal, and intermediate effects, and finds that the Law’s (a) introduction in 1997 may have positively affected retail book prices and (b) amendment in 2014 is associated with (i) a reduction in retail book prices, (ii) no inordinate drop in title-numbers, (iii) price hikes in publishers’ recommended prices for new books -hikes that resemble the price hikes for new books observed in the pre-amendment era. In addition, it estimates that it is more likely than not that between 2013 and 2015, the consumer surplus increased.