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Vertical Restraints in the European Automobile Industry

Author

Listed:
  • Gabrielsen, T.S.
  • Sorgard, L.

Abstract

New regulation for the EU automobile industry allows dealers to engage in multifranchise operation, a practice that formerly could be prohibited by the producers in this market. We argue that a likely consequence of thsi shift in regulatory regime is increased dealer concentration. This will tend to lower wholesale prices as producers must compete more intensely to get access to the dealers. On the other hand, dealers will gain local market power which tend to raise retail prices.

Suggested Citation

  • Gabrielsen, T.S. & Sorgard, L., 1997. "Vertical Restraints in the European Automobile Industry," Papers 13/97, Norwegian School of Economics and Business Administration-.
  • Handle: RePEc:fth:norgee:13/97
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    Cited by:

    1. Tommy Staahl Gabriel & Lars Sorgard, 1998. "The Pro-competitive Effect of Two-Part Tariffs," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 5(1), pages 47-55.

    More about this item

    Keywords

    AUTOMOBILES ; MARKETS ; REGULATIONS;

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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