Price discrimination is used by sellers to increase revenue, but resisted by buyers looking for better deals. Hence the ongoing battle between sellers trying to segment the market and buyers trying to get around the segmentation. Airline tickets are a good example, but security regulations tying tickets to original purchasers killed off the resale market. DVDs are another, with prices differing enormously by region. Technical standards make resale difficult because players differ across regions, but clever technology can often get around that.
In our business, the textbook market has been infamous for charging different prices for the same book in different markets. My colleague Bill Greene’s best-selling econometrics book sells for roughly USD 200 in the US and EUR 75 in Europe. The publisher argues that the “Global Edition” has more non-US content, but how much US content is there anyway in a statistics book? It should come as no surprise, then, that purchasers of foreign editions resell them in the US through eBay, Amazon, and college bookstores.
But is that legal? The Supreme Court scored one for buyers last week, ruling “that buyers of foreign copyrighted works may resell them in the United States without the copyright holder’s permission.” The quote is from Wired, via Kim Ruhl, but see also here.
What’s next? Drugs from Canada?
Update (3/28): John Asker notes that Australia has restrictions on foreign books. This report suggests that the cost to consumers is significant, and that most of the benefits go to foreign authors and publishers. It reminds me of US quotas on Japanese cars in the 1980s, which did wonders for theprofits of Japanese carmakers.
Update (3/30): Clever idea for airlines via Alex Tabbarok.