Crossing the Streams of Price and Promotion Under the Robinson-Patman Act

Abstract:     
The Robinson-Patman Act is not likely to disappear anytime soon, despite repeated efforts at repeal, and the time has come to devote greater attention to moderizing its interpretation. Specifically, it is time to abandon the conventional wisdom that the value of price reductions and promotional assistance may not be aggregated in determining whether or not there has been discrimination. Instead, if the combined values of discounts and promotional assistance offered to each of two competing dealers are equivalent, those offers should not be held to violate the Act even if the individual values of the price and promotion components in each offer are not the same.

Number of Pages in PDF File: 5

Keywords: Robinson-Patman, price discrimination, promotional allowances

JEL Classification: K21

Accepted Paper Series