Does the Service Argument Justify Resale Price Maintenance?
The paper analyzes the welfare effects of resale price maintenance (RPM) when the level of service of one retailer generates negative rather than positive spillovers for other retailers. A simple linear demand system is used and is linked to preferences of consumers via a discrete-choice approach. Under this specification, and in contrast to the literature dealing with this case, RPM may increase service (and price) or decrease service (and price). More interestingly, whether service increases or decreases due to RPM provides no clue to whether welfare increases or decreases due to RPM. Either case may arise independently of the effect of RPM on service.
Volume (Year): 163 (2007)
Issue (Month): 2 (June)
|Contact details of provider:|| Web page: http://www.mohr.de/jite|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(200706)163:2_236:dtsajr_2.0.tx_2-p. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.