Exclusionary Minimum Resale Price Maintenance∗
نویسندگان
چکیده
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 by retailers, upstream competition leads to fierce downstream competition and the breakdown of RPM. Thus, 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 discuss empirical and policy implications, as well as the exclusionary potential of other methods of sharing profits between upstream and downstream firms. JEL Codes: K21, L42, L12, D42
منابع مشابه
Vertical Practices Facilitating Exclusion∗
Resale price maintenance (RPM), slotting fees, loyalty rebates and other related vertical practices can allow an incumbent manufacturer to transfer pro ts to retailers. If these retailers were to accommodate entry, upstream competition could lead to lower industry pro ts and the breakdown of these pro t transfers. Thus, in equilibrium, retailers can internalize the e ect of accommodating entry ...
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