Thanks
Bob

Here in NYC, I think English-speaking Church members are by and large similar to your experience in Minnesota.

From what I’ve seen, I get the feeling that LDS Church growth in the US is heavily influenced by immigration from Utah. In the past decade here in our stake in Manhattan, we have doubled in size, but the number of converts wouldn’t account for 10% of the growth. A large proportion of this growth, at least in our case, is direct immigration from Utah.

Regardless of how common this is around the country (I think its quite common in places like New York, Washington DC and Boston, where there is strong economic reasons for in migration), it means that among a base group of LDS Church members (often the local leaders, in my experience), their feelings are similar to those in Utah.

I guess this is a long way to go to agree with you, JKC.

I think you’re absolutely right that the church operating as a business should be treated as a business. Sheri Dew’s business judgments are not entitled to the same deference as, oh, say, the family proclamation.

But regardless of what should be, I think Preston’s point is that it still is the case that members conflate church businesses with the church itself, as you acknowledge. No doubt Sister Dew’s former ecclesiastical position reinforces that perception.

I wonder, though, how pervasive that attitude is. I mean, if it is true that members in the intermountain west would be loath to see a lawsuit against DB, is the same true for members in Washington, DC, who buy their Mormon books and kitsch from This Is The Place? Kent Larsen can probably tell us about members in New York. Here in Minneapolis, my sense is that most members would probably take the attitude that DB is the church and the church can do no wrong. This may also be reinforced by the fact that most (at least the ones I’ve talked about it with) are also pretty conservative and see anti-trust laws as intrusive government regulation on what should be a free market. I’m not sure if the political attitude or the religious attitude dominates, or if they kind of feed off each other. I wonder if those attitudes are uniquely local, or if they can be generalized to church members as a whole. I guess my question boils down to this: if members conflate the church with DB, why is that the case? Another way to spend a lot of money on testing, huh?

I do agree that these hypothesis should be tested. Now if we could just come up with the tens or hundreds of thousands needed to do the testing!!!

Preston (no. 6): No doubt litigation against the church involves significant social costs. This should not be so when it comes to legitimate business law claims involving the church’s for-profit holdings. (I doubt that church-held for-profit enterprises would hesititate to sue a member or her business if said member/business breached a contract with the church, infringed a church copyright, etc.) Still, you are probably right about how suing DB might look to the ordinary member.

Greenfrog (no. 9): thanks for filling in my admittedly rudimentary analysis. I tried to acknowledge that product and geographic market are complex subjects often determined not by neat legal arguments, but by dueling reports of economist experts. As for the statement you corrected, I should have said something like “assuming both geographic market X and product market Y, DB may have much more than a 50% market share.” (Perhaps X = the intermountain west. Perhaps Y = books authored by current general authorities or Angel Moroni keychains. Who knows!?!)

Regarding your follow-ups…

(1) It’s always worth testing hypotheses about what a given market segment will do before spending lots of money in reliance on an assumption. And that applies to my assumptions, as well. You may be absolutely right that the customers currently purchasing DB’s products would not shift their purchases to other publishers’ less-LDS-themed content products if the DB prices went up. But before spending on a lawsuit, I’d exercise some skepticism of that assumption.

(2) Regarding alternative LDS-themed content, it’s important to recognize that just because two things are not the same in a material way (think Reynolds Wrap and Saran Wrap) does not mean that the demands for them are not cross-elastic with each other. If LDS-themed fiction is less available (because of a price increase), the question still remains whether those seeking LDS-themed content will pay the higher price or shift their consumption patterns to the lower priced (or free) alternatives available, even if those others are not the same — whether non-LDS themed fiction or LDS-themed non-fiction.

To put my point simply, you can’t get what LDS bookstores sell anywhere else.

True, but the antitrust question is not whether customers can’t get Reynolds Wrap elsewhere — it’s whether customers are willing to deal with Saran Wrap when DB’s pricing pops up.

A couple of disagreements and observations (not about the law or how things are done, but about the market):

You wrote:
I suspect that you’d find that those who were buying LDS-themed books for their own reading or for gifts would buy fewer books from DB and more from amazon.com. If that’s right, then LDS-themed books aren’t the right product market defintion.

I suspect you are wrong, that in fact those buying LDS-themed books would pay more rather than switch to books without LDS themes. Because of the relatively low number of copies sold of each title, compared to either the national or Christian markets, LDS books tend to have higher prices anyway.

If customers don’t shift their interests from LDS-themed materials to other-themed materials, then I’d expect them to find other avenues to satisfy the urge for LDS-themed readings. LDS-themed content is available every Sunday for free. The Church’s website provides LDS-themed content for free. The Church itself provides LDS-themed content for free (just call the missionaries).

Well, there is LDS-themed content, and then there is LDS-themed content. What is sold in LDS bookstores like the chains owned by Deseret Book is NOT the same as what is available on Sunday, or through the Church’s website, or from the missionaries, or even through the Distribution center. The sources you mention do not provide fiction, and carry only the non-fiction the Church is willing to put its own name on (the Church has actually tended to reduce the number of titles it does this with over time).

To put my point simply, you can’t get what LDS bookstores sell anywhere else.

Now, there is one other point that complicate’s greenfrog’s analysis slightly — we’re mixing producers in the market (i.e., publishers) with retailers in the market. A different case for claiming Deseret Book is a monopoly, I believe, could be made in the retail area, but much of what greenfrog said in his comment would not apply in that analysis. Publishers are less geographically oriented than retailers, and Deseret Book’s control may be more pervasive on the retail level.

Regardless, as I think I said above (comment #7, agreeing with Preston in #6), I have doubts as to whether an anti-trust claim could be successful, much as I wish it could be.

Um. You can’t get to 50% until you’ve already defined the product market, and I don’t think it’s glaringly obvious that the “product” market is limited to “books with LDS-related content.”

The usual way economists go about defining product markets is to ask “if the price goes up X%, what do customers do?” The amount of X is usually subject to some considerable debate and, in expensive litigation, a few econometric studies. DOJ would like the answer to be 5%, but in many industries, the number actually works out to be much higher than that. At any rate, it’s worth keeping in mind that this kind of analysis leads courts to conclude that aluminium foil and plastic wrap are in the same product market.

So what is the right product market? What happens if DB raises its prices by 10%? I suspect that you’d find that those who were buying LDS-themed books for their own reading or for gifts would buy fewer books from DB and more from amazon.com. If that’s right, then LDS-themed books aren’t the right product market defintion. But even if the reponse were not for shoppers to shift their purchases to differently-themed books, it still isn’t clear that LDS-themed books are a correctly defined product market.

If customers don’t shift their interests from LDS-themed materials to other-themed materials, then I’d expect them to find other avenues to satisfy the urge for LDS-themed readings. LDS-themed content is available every Sunday for free. The Church’s website provides LDS-themed content for free. The Church itself provides LDS-themed content for free (just call the missionaries).

But even if a court were to reach such a conclusion, I’d be pretty surprised if the product market didn’t collapse in the face of the question of viable entry. What are the entry barriers to publishing such materials? There are lots of book publishers in the world who would be willing to make money where there is money to be made (and where theoretical monopoly rents are available to be had, there’s money to be made by new entrants unless entry barriers exist), so I assume that the argument would go to the implied Church endorsement. While some authors may prefer DB because of an implied (or even an explicit) Church endorsement, with a few advertisements, I’m reasonably confident that a publisher could find manuscripts and/or writers with ideas that they’d like to develop into published books. Even if the authors are no-name types with rotten ideas, antitrust courts aren’t going to let treble-damages antitrust cases ride on an entry barrier argument that amounts only to “yeah, but I want to publish better authors than the sort I can attract without Church endorsement.”

Sorry, folks, though I go out of my way to avoid DB publications for lots of reasons, DB’s monopoly power isn’t one of them.