The Role of Price Floor in a Differentiated Product Retail Market

Bakó, Barna (2010) The Role of Price Floor in a Differentiated Product Retail Market. Economic Analysis and Policy, 40 (3). pp. 363-368.

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The ability of a manufacturer to enhance competition among its retailers by imposing a price floor was recently introduced in the literature. The purpose of this article is to revisit this anti-collusive explanation of the retail price maintenance in a more general model in which we introduce asymmetric retailers. We find that a manufacturer can amplify the retail market’s competition by imposing a price foor when retailers sell differentiated products. This result contradicts the prevailing concept of retail price maintenance.

Item Type:Article
Uncontrolled Keywords:retail price maintenance, price floor, collusion
Funders:Gazdasági Versenyhivatal
ID Code:259
Deposited By: Barna Bakó
Deposited On:15 Feb 2011 15:22
Last Modified:03 Jul 2012 00:24

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