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 Research Institute of Industrial Economics in its series Working Paper Series with number 702.
Length: 38 pages
Date of creation: 13 Apr 2007
Date of revision:
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More information through EDIRC
Vertical Restraints; Parallel Imports; Market Integration; Price Discrimination; Competition Policy;
Other versions of this item:
- Mattias Ganslandt & Keith E. Maskus, 2007. "Wholesale Price Discrimination and Parallel Imports," CESifo Working Paper Series 1951, CESifo Group Munich.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-04 (All new papers)
- NEP-COM-2007-05-04 (Industrial Competition)
- NEP-IND-2007-05-04 (Industrial Organization)
- NEP-LAW-2007-05-04 (Law & Economics)
- NEP-MKT-2007-05-04 (Marketing)
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.:
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