Abstract

http://ssrn.com/abstract=2130281
 
 

References (31)



 
 

Citations (1)



 


 



Suggested Retail Prices with Downstream Competition


Simona Fabrizi


Massey University

Steffen Lippert


University of Otago - School of Business - Department of Economics

Clemens Puppe


Karlsruhe Institute of Technology; University of Karlsruhe

Stephanie Rosenkranz


Utrecht University - Utrecht University School of Economics; Centre for Economic Policy Research (CEPR)

August 16, 2012


Abstract:     
We analyze vertical relationships between a manufacturer and competing retailers when consumers have reference-dependent preferences. Consumers adopt the manufacturer’s suggested retail price as their reference price and perceive losses when purchasing above the suggested price and gains when purchasing below it. In equilibrium, retailers undercut price suggestions and the manufacturer suggests a retail price if consumers are sufficiently bargain-loving and perceive retailers as sufficiently undifferentiated. The manufacturer engages in resale price maintenance otherwise. Consumers can be worse off with suggested retail prices than with resale price maintenance, prompting a rethinking of the current legal treatment of suggested retail prices.

Number of Pages in PDF File: 22

Keywords: suggested or recommended retail prices, resale price maintenance, reference-dependent preferences, vertical restraints, competition law and policy

JEL Classification: D03, D43, K21, L42

working papers series


Download This Paper

Date posted: August 16, 2012  

Suggested Citation

Fabrizi, Simona and Lippert, Steffen and Puppe, Clemens and Rosenkranz, Stephanie, Suggested Retail Prices with Downstream Competition (August 16, 2012). Available at SSRN: http://ssrn.com/abstract=2130281 or http://dx.doi.org/10.2139/ssrn.2130281

Contact Information

Simona Fabrizi (Contact Author)
Massey University ( email )
Auckland
New Zealand
+64 9 414 0800 Ext 9335 (Phone)
+64 9 441 8177 (Fax)
HOME PAGE: http://www.massey.ac.nz/~sfabrizi
Steffen Lippert
University of Otago - School of Business - Department of Economics ( email )
PO Box 56
Dunedin
New Zealand
Clemens Puppe
Karlsruhe Institute of Technology ( email )
Kaiserstraße 12
Karlsruhe, Baden Württemberg 76131
Germany
University of Karlsruhe ( email )
Kaiserstrasse 12
Karlsruhe, 76128
Germany
HOME PAGE: http://www.wior.uni-karlsruhe.de/LS_Puppe/Personal/puppe_home
Stephanie Rosenkranz
Utrecht University - Utrecht University School of Economics ( email )
Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands
+31 30 253 9806 (Phone)
+31 30 253 7373 (Fax)
HOME PAGE: http://www.uu.nl/uupublish/defaculteit/persoonlijkepagi/rosenkranz/
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Feedback to SSRN


Paper statistics
Abstract Views: 456
Downloads: 94
Download Rank: 163,428
References:  31
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.609 seconds