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- Title
The Role of Price Floor in a Differentiated Product Retail Market.
- Authors
Bakó, Barna
- Abstract
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 floor when retailers sell differentiated products. This result contradicts the prevailing concept of retail price maintenance.
- Subjects
RETAIL industry; PRICE regulation; PRICE maintenance; ECONOMIC competition; INDUSTRIALISTS
- Publication
Economic Analysis & Policy, 2010, Vol 40, Issue 3, p363
- ISSN
0313-5926
- Publication type
Article
- DOI
10.1016/S0313-5926(10)50035-3