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

Author

Listed:
  • Pierre Biscourp

    (INSEE)

  • Xavier Boutin

    (European Commission and Université Libre de Bruxelles)

  • Thibaud Vergé

    () (CREST)

Abstract

Using a unique dataset merging micro data at product and store level with data on competition within local grocery markets, this paper provides an empirical analysis of a legislation that had the same effect as allowing industry-wide price floors. It shows that, after the introduction of the legislation, the link between retail prices and market concentration has significantly been weakened, especially for branded products. Price dispersion has dropped for branded products more than for store brands and price convergence appears to have taken place across stores. These results are consistent with recent theories on the anticompetitive effects of resale price maintenance in markets with interlocking relationships.

Suggested Citation

  • Pierre Biscourp & Xavier Boutin & Thibaud Vergé, 2013. "The effects of Retail Regulations on Prices : Evidence from the Loi Galland," Working Papers 2013-49, Center for Research in Economics and Statistics.
  • Handle: RePEc:crs:wpaper:2013-49
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Réquillart, Vincent & Simioni, Michel & Varela-Irimia, Xose-Luis, 2008. "Imperfect Competition in the Fresh Tomato Industry," IDEI Working Papers 498, Institut d'Économie Industrielle (IDEI), Toulouse, revised 25 Feb 2009.
    2. Céline Bonnet & Pierre Dubois, 2010. "Inference on vertical contracts between manufacturers and retailers allowing for nonlinear pricing and resale price maintenance," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 139-164.
    3. Bonnet, Céline & Réquillart, Vincent, 2013. "Tax incidence with strategic firms in the soft drink market," Journal of Public Economics, Elsevier, pages 77-88.
    4. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia Villas-Boas, 2013. "The Impact of Retail Mergers on Food Prices: Evidence from France," Working Papers hal-00920460, HAL.
    5. Miklós-Thal, Jeanine & Rey, Patrick & Vergé, Thibaud, 2010. "Vertical relations," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 345-349, July.
    6. Xavier D’Haultfoeuille & Pauline Givord, 2014. "La régression quantile en pratique," Économie et Statistique, Programme National Persée, vol. 471(1), pages 85-111.
    7. Emanuele Giovannetti & Laura Magazzini, 2013. "Resale Price Maintenance: An Empirical Analysis of UK Firms' Compliance," Economic Journal, Royal Economic Society, vol. 123(11), pages 582-595, November.
    8. Bonnet, Céline & Réquillart, Vincent, 2011. "Strategic Pricing and Health Price Policies," IDEI Working Papers 671, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jul 2012.
    9. Bonnet, Céline & Réquillart, Vincent, 2013. "Tax incidence with strategic firms in the soft drink market," Journal of Public Economics, Elsevier, pages 77-88.

    More about this item

    Keywords

    retail prices; pricing regulations; resale price maintenance;

    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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