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Resale Price Maintenance by Japanese Newspapers


  • David Flath


In Japan, newspapers enjoy a special exemption from antimonopoly prohibitionsagainst resale price maintenance (suppliers' stipulations that bar downstreamfirms from price discounting), but are each required to set uniform pricesthroughout Japan. In fact, the newspapers have rarely changed their subscriptionprices in recent years, and the three leading national dailies, together accountingfor about half the total industry circulation, and thirteen other papers accountingfor another one eighth of industry circulation, all have set exactly the same price(3,925 yen per month). The remaining local papers all set lower prices. Theauthorized resale price maintenance, and prohibition against prices thatvarygeographically, have allowed collusive price increases that I here estimate to bearound 500 yen per month, entailing economic waste of about 300-billion yen($3-billion) per year but adding only around 16-billion yen per year to newspaperprofit. The increased profit margin on subscriptions is much offset by reducedsale of ads.

Suggested Citation

  • David Flath, 2010. "Resale Price Maintenance by Japanese Newspapers," ISER Discussion Paper 0787, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0787

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    References listed on IDEAS

    1. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    2. Ambarish Chandra & Allan Collard-Wexler, 2009. "Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 1045-1070, December.
    3. Elena Argentesi & Lapo Filistrucchi, 2007. "Estimating market power in a two-sided market: The case of newspapers," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1247-1266.
    4. Van Cayseele, Patrick & Vanormelingen, Stijn, 2009. "Prices and Network Eects in Two-Sided Markets: the Belgian Newspaper Industry," Working Papers 2009/06, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
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