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Resale Price Maintenance: An Economic Analysis of its Anticompetitive Potential

Author

Listed:
  • Roger D. Blair

    (University of Florida)

  • Wenche Wang

    (University of Florida)

Abstract

A decade ago, Leegin overruled Dr. Miles and subjected RPM to rule-of-reason treatment, under which the potential for anticompetitive conduct should be analyzed (rather than automatically assumed to be present). In its Leegin decision, the Supreme Court identified four ways in which RPM could be used to retard competition and consequently reduce consumer welfare: The first two involve the well-known concerns that RPM could be used to support either a manufacturer cartel or a dealer cartel; the last two involve unilateral conduct designed to foreclose entry or hinder smaller rivals. In this paper, we analyze these potentially harmful uses of RPM. We conclude that RPM does not pose a substantial anticompetitive threat.

Suggested Citation

  • Roger D. Blair & Wenche Wang, 2017. "Resale Price Maintenance: An Economic Analysis of its Anticompetitive Potential," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(2), pages 153-168, March.
    • Handle: RePEc:kap:revind:v:50:y:2017:i:2:d:10.1007_s11151-016-9559-3
    DOI: 10.1007/s11151-016-9559-3
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Antitrust; Resale price maintenance; Verticle agreements;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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