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Brand-specificity of pre-sale services and inter-brand competition with resale price maintenance

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  • Bang, Se Hoon
  • Jin, Yangsoo

Abstract

We analyze the competitive effects of resale price maintenance (RPM) in circumstances in which multiple manufacturers use RPM and distributors have incentives to free-ride on other distributors’ pre-sale services, which can be specific to a manufacturer's brand to some extent. In the antitrust literature and practices, RPM solving the free-rider problem is perceived mostly as pro-competitive, while multiple manufacturers’ RPM is perceived as anti-competitive based on their collusive incentives. In our circumstances, distributors’ services may differentiate manufacturers’ brands ex post, as is desired by manufacturers. Thus, despite solving the free-rider problem, multiple manufacturers’ RPM may harm consumers by softening inter-brand price competition.

Suggested Citation

  • Bang, Se Hoon & Jin, Yangsoo, 2015. "Brand-specificity of pre-sale services and inter-brand competition with resale price maintenance," International Review of Law and Economics, Elsevier, vol. 43(C), pages 1-9.
    • Handle: RePEc:eee:irlaec:v:43:y:2015:i:c:p:1-9
    DOI: 10.1016/j.irle.2015.02.006
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    References listed on IDEAS

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    More about this item

    Keywords

    Resale price maintenance; Brand-specific services; Antitrust policy;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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