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Empirical Effects of Resale Price Maintenance: Evidence from Fixed Book Price Policies in Europe

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  • Rhys J Williams

Abstract

This paper investigates the effects of Resale Price Maintenance (RPM) agreements in Europe by studying a legally permitted form of RPM in the book market. In particular, we study the effects of such agreements on prices and sales, finding that countries which have Fixed Book Prices policies witness higher book sales, relative to countries without such a policy, with no noticeable effect on the average price of books. We suggest that the mechanism for these findings is that FBP policies promote non-price competition and a diverse network of retailers, increasing quantity, whereas a change in bargaining power reduces double marginalisation, offsetting upward pricing pressure from RPM. While these results are limited to the book sector and are based on a limited number of countries changing policy, they nonetheless highlight that RPM agreements have the ability to confer positive competition effects and absolute prohibition of such agreements may not always be warranted.

Suggested Citation

  • Rhys J Williams, 2024. "Empirical Effects of Resale Price Maintenance: Evidence from Fixed Book Price Policies in Europe," Journal of Competition Law and Economics, Oxford University Press, vol. 20(1-2), pages 108-136.
    • Handle: RePEc:oup:jcomle:v:20:y:2024:i:1-2:p:108-136.
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    File URL: http://hdl.handle.net/10.1093/joclec/nhae004
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    References listed on IDEAS

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    1. Alexander MacKay & David A. Smith, 2017. "Challenges for Empirical Research on RPM," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(2), pages 209-220, March.
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    More about this item

    Keywords

    resale price maintenance; fixed book prices; competition economics;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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