I know it's not my week to post, but I found this article interesting. Amazon has been coming under pressure for their practices and treatment of book publishers. The NYT has written an article on what publishers can do in response to Amazon. They present the idea of a monopsony, which is an interesting idea to contrast with a monopoly.
http://www.nytimes.com/2014/05/31/opinion/how-book-publishers-can-beat-amazon.html
Wow, this is very interesting, i had never even thought of Amazon as having some kind of monopoly power. I think Government intervention would be more effective that public pressure or publishers pulling their books away from Amazon. It is not very likely that customers/ public will want to demonstrate or pressure amazon to abandon these practices and it's also unlikely that all publishers will agree to pull their books away from amazon. Government on the other hand has more power that can directly limit their power as well as monitors their practices.
ReplyDeleteThe new age is very crazy when it comes to publishing. I know iTunes and other large music distributors have a lot of power over musicians, and there are many companies similar to this.
ReplyDeleteThis is another example of not knowing how businesses operate. I also agree with Justina's comment except I feel like there isn't much government intervention because there isn't a concise way to regulate a business who does transactions online or with the web.
ReplyDeleteGovernment intervention will not be necessary in this case. The market will eventually weaken Amazon's monopsony with the introduction of new competitors, such as Apple. Since book publishers did not like Amazon's behavior, they looked for alternative buyers of e-books and found Apple, who adjusted their behavior to satisfy the book publishers. I would not be surprised if Amazon does not have monopsony power within the next 10 years in the e-book market. Once Amazon loses its monopsony power, it will have to readjust its behavior as well in order to satisfy the publishers.
ReplyDeleteI am not sure what the government can do to regulate the actions of Amazon. Amazon has a very wide customer base. It might take a while before Amazon loses its monopoly power.
ReplyDeleteI agree with Tyler, I think the market can work itself out here. However, I think it is important to closely monitor the situation. If Amazon does not loose its monopsony power in the coming months, I think some form of intervention may be necessary.
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