In December 2020, Germany implemented a policy restricting online pharmacies from offering rebates on prescription drugs to members of the statutory health insurance. This policy change created a natural experiment, allowing us to analyze its impact on the pharmaceutical market using...

We show that MRPM can increase manufacturer profits and total output even in the absence of traditional justifications based on point-of-sale services, retailer effort, or free-riding. The key insight is that MRPM mitigates channel conflict by altering how retailers balance extracting surplus...

This study examined the vertical transmission of wheat price among the main value chain, looking at the pricing behaviour of certain role players in the wheat production/supply and the distribution of bread, which is a major staple food consumed in South Africa. A nonlinear autoregressive...

We consider a vertically related market where one quantity-setting and another price-setting downstream firm negotiate the terms of a two-part tariff contract with an upstream input supplier. In contrast to the traditional belief, we show that the price-setting firm produces a higher output and...

We provide a novel theory of harm for resale price maintenance (RPM). In a model with two manufacturers and two retailers, we show that RPM facilitates manufacturer collusion when retailers have alternatives to selling a manufacturer's product. Because of the alternatives, manufacturers can only...

We present a model to explain why a manufacturer may impose a minimum resale price (min RPM) in a successive monopoly setting. Our argument relies on the retailer having non-contractible choice variables, which could represent the price of a substitute good and/or the effort the retailer exerts...

We study empirically the price effects of upstream cartels that sell through downstream retailers to final consumers. We focus on a German coffee producer cartel that colluded under two different regimes: (i) involving wholesale prices in 2003 and (ii) with additional resale price maintenance...

Resale price maintenance (hereinafter RPM) is a vertical price fixing mechanism wherein the producer/manufactures enter into an agreement with the retailers/distributors for setting a particular price above or below which the product/service in the market cannot be traded in. It is a price...

We investigate the impact of memory on consumption by linking random disturbances due to variations in air pollution during house viewings with the final house resale transaction price. We use tracked air pollution on the day of viewing and a cross-sectional model with community fixed effects to...

This paper examines the competitive effects of resale price maintenance (RPM) through inventory decisions under demand uncertainty. We focus on the Japanese publishing industry where RPM is allowed. We develop and estimate a model of RPM in which price and inventory are determined before demand...

The paper analyses the conundrum of Antitrust and IP laws in Indian context. It also analyses the approach of the CCI 2 to address the conundrum through various cases. The paper also reckons upon the transitions of the CCI’s approach in Price Determination for Antitrust Scrutiny. The paper...

We examine manufacturers' decisions of whether and how to offer their products for sale over the internet. Manufacturers that rely on promotion of their products by brick and mortar retailers must consider the possibility that internet retailers can free ride off of that promotional effort. This...

Wie können Kunden, Krankenkassen und Apotheken vom Ende der Arzneimittelfestpreise profitieren?Die Autorin wirft, ausgehend von einer Entscheidung des Europäischen Gerichtshofs über die Preisbindung verschreibungspflichtiger Arzneimittel aus dem Jahr 2016, einen aktuellen Blick auf den...

This paper empirically analyzes the effect of the widely used agency model on the retail prices of e-books in United Kingdom. Using a unique cross-sectional data set of e-book prices for a large sample of book titles across all major publishing houses, we exploit cross-genre and cross-publisher...

We provide a novel explanation for why manufacturers want to enforce a minimum resale price (min RPM) on retailers. A manufacturer sells her good via a multi-product retailer to final consumers by charging a linear wholesale price. The manufacturer then maximizes her profit through min RPM...

This paper investigates two coordination mechanisms in a simple distribution channel: 1) the manufacturer's suggested retail price (MSRP) and 2) the minimum advertised price (MAP). With a MSRP, the retailer can engage in a price discount policy to maintain control of the selling price. With a...

This paper explores the concept of vertical restraints or restrictions. It includes references to the competition law regimes of the European Union (EU), United States (US), and the People's Republic of China, as well as the key case law. It is part of the Concurrences' Global Dictionary of...

Thi spaper is concerned with the risk-allocation effects of alternative types of contracts used to set the price of a good tobe delivered in the future. Under a fixed price contract, the price is specified in advance. Under a spot price contract, the price is the price prevailing in the spot...

After describing the essential features of the book market, a welfare analysis of the fixed book price agreement is given. Allowance is made for the opportunity cost of reading. Theoretically, the agreement pushes up book prices and depresses book sales. However, more titles will be published,...

We provide a novel explanation for why manufacturers want to enforce a minimum resale price (min RPM) on retailers. A manufacturer sells her good via a multi-product retailer to final consumers by charging a linear wholesale price. The manufacturer then maximizes her profit through min RPM...

This paper examines the use of market-share thresholds (safe harbors) in evaluating whether a given vertical practice should be challenged. Such thresholds are typically found in vertical restraints guidelines (e.g., the 2000 Guidelines for the European Commission and the 1985 Guidelines for the...

The tensions between books and book markets as expressions of culture and books as products in profit-making businesses are analysed and insights from the theory of industrial organisation are given. Governments intervene in the market for books through laws concerning prices of books, grants...

We provide a theory of how RPM facilitate upstream cartels absent any information asymmetries using a model with manufacturer and retailer competition. Because retailers have an effective outside option to each manufacturer's contract, the manufacturers can only ensure contract acceptance by...

The CCI's decision in Hyundai Motors that the imposition of a discount control provision in their dealership agreements constituted unlawful Resale Price Maintenance (RPM) is the first and only case till date where the CCI found a violation of law with respect to RPM. This order was widely...

Platforms acting as sales channels for producers often charge users for access, via a subscription fee or a markup on hardware. We compare two common forms of vertical pricing agreement that platforms use with sellers: per-unit and proportional fees. In particular, we analyze the critical role...

This paper analyzes downstream merchant price coherence when upstream platforms are vertically differentiated. When merchants are unable to charge different prices to consumers who purchase their product using different platforms, fee competition among platforms becomes more intense. We show...

The subject of vertical restraints is well-trod territory in antitrust. Most of the cases, and economic literature, have focused, however, on the physical world of manufacturers and distributors. This paper considers what's new and different about the digital world that matters for the antitrust...

A major part of antitrust violations are comprised by price fixing arrangements, as they operate against the standard of price being determined by market forces. Such arrangements are a cause of concern in both horizontal and vertical markets. In this regard, Resale Price Maintenance agreements...

Aircraft are manufactured with unusual attention to quality control. The.product common in this industry limits the potential for Lordstown-style disgruntled employee sabotage documented in the auto industry. A loose bolt that rattles inside an automobile’s door frame is of a different...

Is resale price maintenance per se illegal in China, or subject to a rule of reason analysis? Who bears the burden to prove anti-competitive effects, or their absence, in government investigations? Are the approach and standard for resale price maintenance different for government investigations...

Platforms acting as sales channels for producers often charge users for access, via a subscription fee or a markup on hardware. We compare two common forms of vertical pricing agreement that platforms use with sellers: per-­unit and proportional fees. In particular, we analyze the critical role...

We provide a theory of how RPM facilitate upstream cartels absent any information asymmetries using a model with manufacturer and retailer competition. Because retailers have an effective outside option to each manufacturer’s contract, the manufacturers can only ensure contract acceptance by...

"The question of how to properly enforce against RPM has been a contentious debate for decades on both sides of the Atlantic. The catalyst is the acceptance that RPM can generate both anti-competitive effects and pro-competitive efficiencies that need to be properly balanced to ensure against...

The topic of vertical restraints has generated a good deal of interest, discussion, and controversy in recent years. Moreover, the recent publication of the US Justice Department's 'Vertical Restraints Guidelines' ensures that the subject will continue to be discussed, both in the US and in...

The suggested retail price (SRP) is widely applied in various industries and product categories in practice, and it can serve as a reference price, which impacts a consumer's utility through reference effect. In this paper, we study a firm's decisions of whether and how the firm should set an...

Recent theory has examined the competitive effects of minimum advertised price (MAP) restrictions: manufacturer policies that can limit the ability of consumers to search for product prices. In this paper, we empirically study the effect of a major electronics manufacturer's MAP policy on the...