Wholesale Price Discrimination and Parallel Imports
AbstractWe develop a model of vertical pricing in which an original manufacturer sets wholesale prices in two markets integrated at the distributor level by parallel imports (PI). In this context we show that if competition policy requires uniform wholesale prices across locations it would push retail prices toward convergence as transportation costs fall. However, these retail prices could be higher than those induced without restrictions on prices charged to distributors. Thus, the competition policy may not be optimal for consumer welfare.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1951.
Date of creation: 2007
Date of revision:
vertical restraints; parallel imports; market integration; price discrimination; competition policy;
Other versions of this item:
- Ganslandt, Mattias & Maskus, Keith E., 2007. "Wholesale Price Discrimination and Parallel Imports," Working Paper Series 702, Research Institute of Industrial Economics.
- F15 - International Economics - - Trade - - - Economic Integration
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
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