Arbitraging the textbook market

March 27, 2013

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.

One Response to “Arbitraging the textbook market”

  1. Jack Sheehan Says:

    If my employer reimburses my books 100%, and I buy the book from the bookstore at the start of the semester, and then I sell it back to the book store used at the end of the store, is that arbitrage?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: