>Jim wrote,
>> After all, it's the
>> sovereign consumers who decide what
>> sucks and what doesn't suck.
>
>But remember one of the key characteristics of the
>textbook market--the ultimate user (the student)
>does not pick the book. The professor does (and
>most often the professor does not have information
>about the price).
Say, rather, that demand for books is highly inelastic once the
professor has adopted it, and that total $$$ spent by students
doesn't play a large role (it does play some role) in the
professorial adoption decision.
Publishers and editors will say that although they use their local
post-adoption monopoly power to the fullest to extract revenue from
students, they and their companies don't get to keep it. They compete
for course adoptions by spending more and more money on supplements
and add-ons that they hope will make the professor happy, and make
him or her adopt the book.
This is a highly dissipative activity: the value of the supplements
to the professor is much less than the cost to the students of the
money spent producing them. It is a perfect illustration of how
monopolistically competitive markets with entry do not produce
anything like the social optimum...
Brad DeLong
