Exclusionary Minimum Resale Price Maintenance /
Asker, John.
Exclusionary Minimum Resale Price Maintenance / John Asker, Heski Bar-Isaac. - Cambridge, Mass. National Bureau of Economic Research 2010. - 1 online resource: illustrations (black and white); - NBER working paper series no. w16564 . - Working Paper Series (National Bureau of Economic Research) no. w16564. .
December 2010.
An upstream manufacturer can use minimum retail 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 investigate when an incumbent would prefer to exclude, rather than collude with, the entrant and the effect of a retailer cartel. We also consider the effect of imperfect competition. Empirical and policy implications are discussed.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Exclusionary Minimum Resale Price Maintenance / John Asker, Heski Bar-Isaac. - Cambridge, Mass. National Bureau of Economic Research 2010. - 1 online resource: illustrations (black and white); - NBER working paper series no. w16564 . - Working Paper Series (National Bureau of Economic Research) no. w16564. .
December 2010.
An upstream manufacturer can use minimum retail 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 investigate when an incumbent would prefer to exclude, rather than collude with, the entrant and the effect of a retailer cartel. We also consider the effect of imperfect competition. Empirical and policy implications are discussed.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.