STRATEGY AND BUSINESS ECONOMICS


Digitization and the Market for Physical Works: Evidence from the Google Books Project


IMKE REIMERS J. THOMAS AND NANCY W. CLARK


ASSOCIATE PROFESSOR OF ENTREPRENEURSHIP Charles H. Dyson School of


Applied Economics and Management


Cornell SC Johnson College of Business Cornell University


Co-authors • Imke Reimers


J. Tomas and Nancy W. Clark Associate Professor of


Entrepreneurship, Charles H. Dyson School of Applied Economics and Management, Cornell SC Johnson College of Business, Cornell University • Abhishek Nagaraj, Haas School of Business, UC Berkeley


Summary Digitization and the internet have dramatically affected off-line markets for in-


formation goods like books, movies, and music, providing alternative content access, often at very low prices or for free. Tis raises the question of whether and how free digital distribution affects the sales for physical versions of these goods. On one hand, free digital distribution can lower sales of physical coun- terparts by providing consumers a viable substitute. On the other hand, if the digital version facilitates search and discovery of the original work, it can raise physical sales.


Te authors shed light on this theoretical ambiguity by using a simple theoret- ical framework incorporating substitution and discovery mechanisms. Teir work indicates that while the net effect of book digitization is ambiguous, sales could increase if the discovery of a text through a digital channel compensates for the cannibalization of its physical sales. Te framework also suggests that the discovery effect should be stronger for less popular books, should apply to nondigitized books by a digitized author, and should be muted for those who already had access to alternate search technologies prior to digitization. Finally, the framework considers the effect of digital access on the supply of new editions and suggests that digitization could increase the availability of follow-on editions, especially from smaller, independent publishers.


American Economic Journal: Economic Policy, 15, 4, November 2023 LINK TO PAPER


TO IMPACT CONTENTS


RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2023 EDITION


75


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113