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Does the Per Se Rule Deter Vertical Price-Fixing?

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  • Butz, David A
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    Abstract

    Manufacturers can easily circumvent legal restrictions on resale price maintenance. They can coordinate and finance their retailers' meet-the-competition price guarantees and guarantee the margins of retailers damaged by price-cutting rivals. Or they can offer various other rewards to outlets that do not discount. Hence, no retailer wants to discount first and, in equilibrium, all charge the 'suggested' resale price. Antitrust enforcers who want to prevent manufacturers from controlling resale prices would need to scrutinize the whole range of transfers between manufacturers and retailers. Unfortunately, doing so could state essential services and penalize innocent firms. Copyright 1996 by Oxford University Press.

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    Bibliographic Info

    Article provided by Western Economic Association International in its journal Economic Inquiry.

    Volume (Year): 34 (1996)
    Issue (Month): 4 (October)
    Pages: 770-80

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    Handle: RePEc:oup:ecinqu:v:34:y:1996:i:4:p:770-80

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    Cited by:
    1. Jonathan Beck, 2004. "Fixed, Focal, Fair? Book Prices Under Optional Resale Price Maintenance," CIG Working Papers SP II 2004-15, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).

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