Resale Price Maintenance: An Economic Analysis of its Anticompetitive Potential

Resale Price Maintenance: An Economic Analysis of its Anticompetitive Potential A decade ago, Leegin overruled Dr. Miles and subjected RPM to rule-of-reason treatment, under which the potential for anticompetitive conduct should be analyzed (rather than automatically assumed to be present). In its Leegin decision, the Supreme Court identified four ways in which RPM could be used to retard competition and consequently reduce consumer welfare: The first two involve the well-known concerns that RPM could be used to support either a manufacturer cartel or a dealer cartel; the last two involve unilateral conduct designed to foreclose entry or hinder smaller rivals. In this paper, we analyze these potentially harmful uses of RPM. We conclude that RPM does not pose a substantial anticompetitive threat. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Resale Price Maintenance: An Economic Analysis of its Anticompetitive Potential

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Publisher
Springer Journals
Copyright
Copyright © 2016 by Springer Science+Business Media New York
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-016-9559-3
Publisher site
See Article on Publisher Site

Abstract

A decade ago, Leegin overruled Dr. Miles and subjected RPM to rule-of-reason treatment, under which the potential for anticompetitive conduct should be analyzed (rather than automatically assumed to be present). In its Leegin decision, the Supreme Court identified four ways in which RPM could be used to retard competition and consequently reduce consumer welfare: The first two involve the well-known concerns that RPM could be used to support either a manufacturer cartel or a dealer cartel; the last two involve unilateral conduct designed to foreclose entry or hinder smaller rivals. In this paper, we analyze these potentially harmful uses of RPM. We conclude that RPM does not pose a substantial anticompetitive threat.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Dec 23, 2016

References

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