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Deterring Fraud: The Role of Resale Price Maintenance.

Authors :
Springer, Robert F.
Frech III, H. E.
Source :
Journal of Business; Jul86, Vol. 59 Issue 3, p433-449, 17p
Publication Year :
1986

Abstract

Using a model like that of Klein and Leffler's, we demonstrate theoretically that a manufacturer's desire to signal relative quality differences by relative retail price differences may be thwarted by the misleading markups of independent retailers. Resale price maintenance is one instrument that a manufacturer can use to avoid this problem. We present empirical evidence from a recent antitrust case in which forcing a manufacturer to drop resale price maintenance did lead to mis-leading (and also higher) markups. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
00219398
Volume :
59
Issue :
3
Database :
Complementary Index
Journal :
Journal of Business
Publication Type :
Academic Journal
Accession number :
4584649
Full Text :
https://doi.org/10.1086/296346