*We benefited from helpful discussions with Rodolphe Dos Santos Ferreira, Bruno Jullien and Jean Tirole on an earlier draft. We are also grateful to Eric Avenel, Bill Rogerson, the Editor and two anonymous referees for their remarks.
RESALE PRICE MAINTENANCE AND INTERLOCKING RELATIONSHIPS*
Article first published online: 24 DEC 2010
© 2010 The Authors. The Journal of Industrial Economics © 2010 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics
The Journal of Industrial Economics
Volume 58, Issue 4, pages 928–961, December 2010
How to Cite
REY, P. and VERGÉ, T. (2010), RESALE PRICE MAINTENANCE AND INTERLOCKING RELATIONSHIPS. The Journal of Industrial Economics, 58: 928–961. doi: 10.1111/j.1467-6451.2010.00439.x
- Issue published online: 24 DEC 2010
- Article first published online: 24 DEC 2010
Dampening of interbrand as well intrabrand competition is often advanced to justify per se illegality of RPM. We analyze this argument in a context where rival manufacturers distribute their products through the same competing retailers. We show that RPM indeed limits the exercise of competition at both levels and can generate industry-wide monopoly pricing. The impact on prices depends on the extent of potential competition at either level as well as on the parties' influence in determining the terms of the contracts. Our analysis sheds a new light on ongoing legal developments and is supported by recent empirical studies.