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A Note on Elasticity and Price Dispersions in the Music Recording Industry

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Abstract

The present note examines price dispersions inthe music recording industry between new release andmid-line (older) recordings. The model employs theframework developed within the industrial economicsliterature and provides empirical results suggestingthat new release prices are lower than those ofmid-level recordings. This result follows fromdiffering buyer characteristics and varying levelsof close substitutes, leading to higher demandelasticities for new release recordings. Finally,the theoretical expectations should hold in thepresence of either significant scale economies ormodest minimum efficient scales of production.

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Authors and Affiliations

  1. Department of Economics and International Business, The University of Southern Mississippi, Box 5072, USM Station, Hattiesburg, MS, 39406-5072, U.S.A.

    Franklin G. Mixon Jr.

  2. Department of Economics and Finance, University of Louisiana, Lafayette, LA, 70504, U.S.A.

    Rand W. Ressler

Authors
  1. Franklin G. Mixon Jr.
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  2. Rand W. Ressler
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Mixon, F.G., Ressler, R.W. A Note on Elasticity and Price Dispersions in the Music Recording Industry. Review of Industrial Organization 17, 465–470 (2000). https://doi.org/10.1023/A:1007820616596

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  • DOI: https://doi.org/10.1023/A:1007820616596

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