The Role of Price Floor in a Differentiated Product Retail Market
AbstractThe ability of a manufacturer to enhance competition among its retailers by im- posing a price oor was recently introduced in the literature. The purpose of this article is to revisit this anti-collusive explanation of the retail price maintenance in a more general model in which we introduce asymmetric retailers. We nd that a manufacturer can amplify the retail market's competition by imposing a price oor when retailers sell di erentiated products. This result contradicts the prevailing concept of retail price maintenance.
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Bibliographic InfoArticle provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).
Volume (Year): 40 (2010)
Issue (Month): 3 (December)
Retail price maintenance; Price floor; Collusion;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
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