Flawed Economic Models have Misled RPM Policy in the US, Canada and the EU
AbstractWe show that some influential literature supporting the RPM efficiency view is flawed when it relies on the presale service justification for RPM. In particular we consider presale services that do not modify in use value of a good, what we term sterile services. We debunk what we call the Bork proposition, using Bork¹s own assumptions except one. Specifically Bork does not consider the fact that value in use may differ from prepurchase perceived value in use. We apply the value-in-use standard which exposes the loss in consumer surplus in Bork¹s model and reveals that even Bork¹s dissenters significantly underestimate their calculated losses to inframarginal consumers When consumer surplus is the antitrust/competition policy standard, our results suggest that a rule of reason regime in which competition/antitrust authorities or consumer protection agencies bear the burden of proof is inferior to a per se regime.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Département des sciences administratives, UQO in its series RePAd Working Paper Series with number UQO-DSA-wp042013.
Length: 52 pages
Date of creation: 01 Jul 2013
Date of revision:
Contact details of provider:
Postal: Pavillon Lucien Brault, 101 rue Saint Jean-Bosco, Gatineau (Québec) J8Y 3G5
Phone: (819) 595-3900
Fax: (819) 773-1747
Web page: http://www.repad.org/
More information through EDIRC
Resale Price Maintenance; Welfare Effects; Antitrust.;
Find related papers by JEL classification:
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-06 (All new papers)
- NEP-COM-2013-09-06 (Industrial Competition)
- NEP-IND-2013-09-06 (Industrial Organization)
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.:
- Patrick REY & Thibaud VERGE, 2009.
"Resale Price Maintenance and Interlocking Relationships,"
2009-11, Centre de Recherche en Economie et Statistique.
- Patrick Rey & Thibaud Vergé, 2010. "Resale Price Maintenance And Interlocking Relationships," Journal of Industrial Economics, Wiley Blackwell, vol. 58(4), pages 928-961, December.
- John Asker & Heski Bar-Isaac, 2011.
"Exclusionary Minimum Resale Price Maintenance,"
11-22, New York University, Leonard N. Stern School of Business, Department of Economics.
- Avinash Dixit & Victor Norman, 1978. "Advertising and Welfare," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 1-17, Spring.
- Deneckere, Raymond & Marvel, Howard P & Peck, James, 1996.
"Demand Uncertainty, Inventories, and Resale Price Maintenance,"
The Quarterly Journal of Economics,
MIT Press, vol. 111(3), pages 885-913, August.
- Howard P. Marvel & Raymond Deneckere & James Peck, 1995. "Demand Uncertainty, Inventories, and Resale Price Maintainance," Working Papers 019, Ohio State University, Department of Economics.
- Klein, Benjamin & Murphy, Kevin M, 1988. "Vertical Restraints as Contract Enforcement Mechanisms," Journal of Law and Economics, University of Chicago Press, vol. 31(2), pages 265-97, October.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Calmes).
If references are entirely missing, you can add them using this form.