The Image Theory: RPM and the Allure of High Prices
23 Pages Posted: 26 Dec 2009 Last revised: 18 May 2010
Date Written: May 17, 2010
A century of debates over resale price maintenance (RPM) has generated hundreds of articles that develop a handful of theories. This article introduces a new theory - “the image theory,” which builds on one of the oldest - yet neglected - explanations that manufacturers offer for RPM: uniform retail prices for branded goods maintain the product’s exclusive image, thereby luring consumers and increasing revenues.
Keywords: Antitrust, RPM, Resale Price Maintenance,Trademarks, Luxury Goods, Status Goods
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