A theoretical analysis of resale price maintenance
1979; Elsevier BV; Volume: 21; Issue: 3 Linguagem: Inglês
10.1016/0022-0531(79)90049-8
ISSN1095-7235
Autores Tópico(s)Economics of Agriculture and Food Markets
ResumoResale Price Maintenance has been defended as a tool to prevent free riding among retailers and condemned as a tool to protect price fixing schemes. This paper presents an economic model in which customers search for products from among those provided by manufacturers and competitive dealers who provide, at a cost, information useful in the customers' search. It is shown that competitive manufacturers will not maintain the resale price above the competitive dealer equilibrium but that the monopolist manufacturer will under certain elasticity conditions. Thus resale price maintenance is a sufficient but not necessary condition of monopoly.
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