A Structural Analysis of Resale Price Maintenance in the Japanese Publishing Industry

2021-05-24 CEP Funded Projects

Minimum resale price maintenance (RPM) is a vertical contract between manufacturers and retailers that requires the retailers sell the manufacturers’ products at or above a price floor set by the manufacturers. To facilitate rule-of-reason-based antitrust policy toward RPM, the research project aims to develop an empirical model to quantify one of the potential pro-competitive effects of RPM, inline with Deneckere et al.(1996,1997)’s theory. The model will then be applied to the data from Japanese publishing industry, in which RPM is allowed as a special exemption. The adoption of RPM can be either pro-competitive or anti-competitive in the empirical model depending on parameters, namely, the degree of demand uncertainty and substitution across bookstores. By counterfactual simulations using the estimated model, the project further studies whether RPM can be justified from social planner’s viewpoint.

Kohei Kawaguchi
Assistant Professor, Department of Economics
Kohei Kawaguchi is an assistant professor of Economics at Hong Kong University of Science and…
Jeff Qiu
Economist, The U.S. Department of Justice
Yi Zhang
PhD candidate of Economics, HKUST

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