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Brand-specificity of pre-sale services and inter-brand competition with resale price maintenance
- Brand-specificity of pre-sale services and inter-brand competition with resale price maintenance
- Bang, Se Hoon; Jin, Yangsoo
- Ewha Authors
- SCOPUS Author ID
- Issue Date
- Journal Title
- INTERNATIONAL REVIEW OF LAW AND ECONOMICS
- 0144-8188; 1873-6394
- vol. 43, pp. 1 - 9
- Resale price maintenance; Brand-specific services; Antitrust policy
- ELSEVIER SCIENCE INC
- SSCI; SCOPUS
- We analyze the competitive effects of resale price maintenance (RPM) in circumstances in which multiple manufacturers use RPM and distributors have incentives to free-ride on other distributors' pre-sale services, which can be specific to a manufacturer's brand to some extent. In the antitrust literature and practices, RPM solving the free-rider problem is perceived mostly as pro-competitive, while multiple manufacturers' RPM is perceived as anti-competitive based on their collusive incentives. In our circumstances, distributors' services may differentiate manufacturers' brands ex post, as is desired by manufacturers. Thus, despite solving the free-rider problem, multiple manufacturers' RPM may harm consumers by softening inter-brand price competition. (C) 2015 Elsevier Inc. All rights reserved.
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