Manufacturer carterls and resale price maintenance

Arbeitspapier

In a model with manufacturer and retailer competition, we show that RPM facilitates manufacturer cartels when retailers have an outside option to selling the manufacturer's product. Because retailers have an effective outside option, the manufacturer can only ensure contract acceptance by leaving a sufficient margin to the retailers. This restricts the wholesale price level even when manufacturers collude. In this context, collusion can only become profitable for manufacturers if they use resale price maintenance. We thus provide a novel theory of harm for resale price maintenance when manufacturers collude and illustrate the fit of this theory in competition policy cases.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2006

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Antitrust Law ; Illegal Behavior and the Enforcement of Law ; Monopolization; Horizontal Anticompetitive Practices ; Vertical Restraints; Resale Price Maintenance; Quantity Discounts ; Retail and Wholesale Trade; e-Commerce
• Subject: resale price maintenance ; collusion ; retailing

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hunold, Matthias ; Muthers, Johannes
• Event: Veröffentlichung
• (who): Johannes Kepler University of Linz, Department of Economics
• (where): Linz
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/246296
• Last update: 10.03.2025, 11:44 AM CET