Kilts Center for Marketing at Chicago Booth – Nielsen Dataset Paper Series 2-006
54 Pages Posted: 24 Oct 2014 Last revised: 28 Aug 2016
Date Written: June 16, 2014
This study is the first to estimate the empirical effects of minimum resale price maintenance (RPM) across a broad variety of products. We analyze conflicting theories using an exogenous state-level law change resulting from the 2007 Leegin Supreme Court decision. In states where RPM contracts are treated under the more relaxed rule-of-reason standard, prices increased. We estimate the welfare impact and find that, in aggregate, consumers are worse off in the rule-of-reason states. Though welfare decreased and prices increased, we find little support for the broad application of any particular theory.
Keywords: Leegin, Resale Prince Maintenance
JEL Classification: L42, D22, L10, D40, K21
Suggested Citation: Suggested Citation
MacKay, Alexander and Smith, David Aron, The Empirical Effects of Minimum Resale Price Maintenance (June 16, 2014). Kilts Center for Marketing at Chicago Booth – Nielsen Dataset Paper Series 2-006. Available at SSRN: https://ssrn.com/abstract=2513533 or http://dx.doi.org/10.2139/ssrn.2513533