Details

Autor(en) / Beteiligte

• Richardson, Martin
• Stähler, Frank

Titel

On the “uniform pricing puzzle” in recorded music

Ist Teil von

• Information economics and policy, 2016-03, Vol.34, p.58-66

Ort / Verlag

Amsterdam: Elsevier B.V

Erscheinungsjahr

2016

Link zum Volltext

Quelle

PAIS Index

Beschreibungen/Notizen

• •We model record companies’ pricing when consumers cannot initially observe quality.•Advertising is shown to be ineffective as a signal of quality.•Ex ante investment in expected quality makes price pooling more likely.•We argue that record companies’ high A&R expenditure constitutes such ex ante investment. This paper proposes a possible explanation for uniform pricing in the recorded music industry, based on a pooling equilibrium across different quality types. We show that an ex ante ability to invest in the probability of success – which we identify with record companies’ artists and repertoire (A&R) expenditures – makes such a pooling equilibrium more likely.