Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283410 
Year of Publication: 
2023
Series/Report no.: 
Volkswirtschaftliche Diskussionsbeiträge No. 197-23
Publisher: 
Universität Siegen, Fakultät III, Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht, Siegen
Abstract: 
We provide a novel theory of harm for resale price maintenance (RPM). In a model with two manufacturers and two retailers, we show that RPM facilitates manufacturer collusion when retailers have alternatives to selling a manufacturer's product. Because of the alternatives, manufacturers can only ensure that retailers sell their products by leaving sufficient retail margins. This restricts the wholesale price level even when the manufacturers collude. RPM allows colluding manufacturers to establish higher prices. The use of renegotiation-proof RPM stabilizes collusion whereas otherwise RPM can decrease the range of discount factors which enable stable collusion.
Subjects: 
resale price maintenance
collusion
retailing
JEL: 
D43
K21
K42
L41
L42
L81
Document Type: 
Working Paper

Files in This Item:
File
Size
521.95 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.