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The Effects of Retail Regulations on Prices: Evidence from the Loi Galland

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Author Info
Pierre Biscourp (ENSAE)
Xavier Boutin (INSEE (D3E-MSE) and CREST-LEI)
Thibaud Vergé (CREST-LEI)

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Abstract

In 1997, a new legislation banning below-invoice retail prices came into force in France. Individually negotiated discounts could no longer be passed on to consumers, which is equivalent to allowing industry-wide price floors. The anti-competitive effects of such practices are well-known. The elimination of intra-brand competition is expected to lead to a sharp increase in the retail prices. Using CPI raw data, we find evidence supporting this claim. The modification or revocation of the existing legislation (as it has been done in Ireland in December 2005) would then be expected to reduce retail prices.

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File URL: http://www.insee.fr/fr/publications-et-services/docs_doc_travail/g2008-02.pdf
File Format: application/pdf
File Function: Document de Travail de la DESE numéro G 2008-02
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Publisher Info
Paper provided by Institut National de la Statistique et des Etudes Economiques, D3E in its series Documents de Travail de la DESE - Working Papers of the DESE with number 2008-02.

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Length: 40 pages
Date of creation: May 2008
Date of revision: May 2008
Handle: RePEc:crs:wpdeee:2008-02

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Related research
Keywords: retail prices; pricing regulations; resale price maintenance;

Other versions of this item:

Find related papers by JEL classification:
L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Daniel P. O'Brien & Greg Shaffer, 1992. "Vertical Control with Bilateral Contracts," RAND Journal of Economics, The RAND Corporation, vol. 23(3), pages 299-308, Autumn. [Downloadable!] (restricted)
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  5. Barros, Pedro Pita & Brito, Duarte & de Lucena, Diogo, 2006. "Mergers in the food retailing sector: An empirical investigation," European Economic Review, Elsevier, vol. 50(2), pages 447-468, February. [Downloadable!] (restricted)
  6. Dobson, Paul W. & Waterson, Michael, 2007. "The competition effects of industry-wide vertical price fixing in bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 935-962, October. [Downloadable!] (restricted)
  7. Marie-Laure Allain ; Claire Chambolle, 2004. "Loss-leaders Banning Laws as Vertical Restraints," Working Papers 2004-19, Centre de Recherche en Economie et Statistique. [Downloadable!]
  8. Rey, Patrick & Tirole, Jean, 2007. "A Primer on Foreclosure," Handbook of Industrial Organization, Elsevier. [Downloadable!] (restricted)
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  9. Jacques Cremer & Michael H. Riordan, 1987. "On Governing Multilateral Transactions with Bilateral Contracts," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 436-451, Autumn. [Downloadable!] (restricted)
  10. Bruce Marion, 1998. "Competition in Grocery Retailing: The Impact of a New Strategic Group on BLS Price Increases," Review of Industrial Organization, Springer, vol. 13(4), pages 381-399, August. [Downloadable!] (restricted)
  11. Asplund, Marcus & Friberg, Richard, 2002. " Food Prices and Market Structure in Sweden," Scandinavian Journal of Economics, Blackwell Publishing, vol. 104(4), pages 547-66, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Xavier Boutin & Lionel Janin, 2008. "Are Prices Really Affected by Mergers?," Documents de Travail de la DESE - Working Papers of the DESE 2008-08, Institut National de la Statistique et des Etudes Economiques, D3E, revised Jul 2008. [Downloadable!]
  2. Bonnet, CéLine & Dubois, Pierre, 2008. "Inference on Vertical Contracts between Manufacturers and Retailers Allowing for Non Linear Pricing and Resale Price Maintenance," IDEI Working Papers 519, Institut d'Économie Industrielle (IDEI), Toulouse, revised Dec 2008. [Downloadable!]
    Other versions:
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