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How to deal with resale price maintenance: What can we learn from empirical results?

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  • Jürgen-Peter Kretschmer

Abstract

The US Supreme Court’s overruling of the pre-existing per se illegality of resale price maintenance and the recommendation of a rule of reason approach in the Leegin decision (Leegin Creative Leather Products, Inc. vs. PSKS, Inc., 2007), raise the question whether other jurisdictions should follow this approach and what future assessments of resale price maintenance cases should look like. Policy decisions have to rely on the importance of various theories concerning welfare effects of resale price maintenance practices, which must be supported by empirical studies. The paper focuses on empirically confirmed theoretical arguments for the analysis and discussion of existing assessment proposals. Furthermore, the paper derives a new recommended assessment procedure for resale price maintenance from a special point of view by combining empirical results with the decision-theoretic approach of optimal sequential investigation rules. Copyright Springer Science+Business Media, LLC 2014

Suggested Citation

  • Jürgen-Peter Kretschmer, 2014. "How to deal with resale price maintenance: What can we learn from empirical results?," European Journal of Law and Economics, Springer, vol. 38(2), pages 343-368, October.
    • Handle: RePEc:kap:ejlwec:v:38:y:2014:i:2:p:343-368
    DOI: 10.1007/s10657-012-9325-4
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    References listed on IDEAS

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    1. Thomas W. Gilligan, 1986. "The Competitive Effects of Resale Price Maintenance," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 544-556, Winter.
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    4. Ippolito, Pauline M, 1991. "Resale Price Maintenance: Empirical Evidence from Litigation," Journal of Law and Economics, University of Chicago Press, vol. 34(2), pages 263-294, October.
    5. Hersch, Philip L, 1994. "The Effects of Resale Price Maintenance on Shareholder Wealth: The Consequences of Schwegmann," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 205-216, June.
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    7. Ippolito, Pauline M & Overstreet, Thomas R, Jr, 1996. "Resale Price Maintenance: An Economic Assessment of the Federal Trade Commission's Case against the Corning Glass Works," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 285-328, April.
    8. Wolfgang Kerber & Jürgen-Peter Kretschmer & Georg von Wangenheim, 2008. "Optimal Sequential Investigation Rules in Competition Law," MAGKS Papers on Economics 200816, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
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    Cited by:

    1. Elif Cemre Hazıroğlu & Semih Gökatalay, 2016. "Minimum resale price maintenance in EU in the aftermath of the US Leegin decision," European Journal of Law and Economics, Springer, vol. 42(1), pages 45-71, August.

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    More about this item

    Keywords

    Antitrust law; Law enforcement; Resale price maintenance; Decision-making; K21; K40; L42; D81;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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