E-book Overcharge: The Effect of U.S. v. Apple Inc. et. al. (2013) on e-book Prices
Haverford College. Department of Economics
Place of Publication
The Holland Hunter 1943 Economics Department Thesis Prize
Table of Contents
This thesis sets out to estimate the effect of U.S. v. Apple Inc. et. al. (2013) on e-book prices by implementing a reduced form model, dummy variable approach (Nieberding, 2006), using a difference-in-differences analysis (Ashenfelter, 2013). This study follows from a deep history of relevant literature on constructing estimation of cartel overcharge models and using them to estimate but-for prices on real-world cartels (Connor, 2001; Clarke and Evenett, 2003; Frank and Schliffke, 2013). Here, I estimate the change in the accused publishers' e-book retail prices relative to Random House (the one publisher among the Big Six never accused of collusion) due to each of the accused publisher's respective settlement with the U.S. Department of Justice and the disbanding of their agency contracts with their retailers. I find a 16.7 percent average decrease in e-book retail prices from the time-period immediately before to immediately after each publisher's settlement date with the D.O.J. These findings suggest that e-book retail prices have been restored to their pre-collusion, competitive levels.