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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/31609
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| Title: | Exclusionary Minimum Resale Price Maintenance |
| Authors: | Asker, John
Bar-Isaac, Heski |
| Issue Date: | 17-Sep-2012 |
| Abstract: | An upstream manufacturer can use minimum resale price maintenance (RPM)
to exclude potential competitors. RPM lets the incumbent manufacturer
transfer profits to retailers. If entry is accommodated, upstream
competition leads to fierce down-stream competition and the breakdown of
RPM. Hence, via RPM, retailers internalize the effect of accommodating
entry on the incumbent's profits. Retailers may prefer not to
accommodate entry; and, if entry requires downstream accommodation,
entry can be deterred. We also discuss empirical and policy
implications, as well as the exclusion-ary potential of other methods of
sharing prots between upstream and downstream firms, such as slotting
fees and revenue sharing. |
| URI: | http://hdl.handle.net/2451/31609 |
| Appears in Collections: | Economics Working Papers
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