An investigation of book market aggregation in Amazon

Abstract

The launch of Amazon's e-Marketplace to co-locate primary (sale of new books) and secondary (resale of used books) markets has disrupted the serenity of the book markets and invited enormous debate over the survivability of the primary market sellers. Grounded on information economics and decision under uncertainty, this study takes a different perspective by arguing that whether Amazon's market aggregation initiation will adversely affect new booksellers depends on whether the consumers perceived the quality of both new and used books to be symmetrically uncertain or asymmetrically uncertain. The research further explores the possibility of how the reputation feedback mechanism could be beneficial to the new booksellers.