State Automobile Franchise Laws: Public or Private Interests?

Phoenix Center Perspectives 16-06

15 Pages Posted: 8 Feb 2017

See all articles by T. Randolph Beard

T. Randolph Beard

Auburn University

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Date Written: July 12, 2016

Abstract

As detailed in this perspective, the view that state auto franchise laws are protectionist is inconsistent with the evidence and theory used to support the claim. Moreover, an economic model of car and service sales shows that franchise laws, by introducing an intermediary between the individual consumer and the powerful manufacturer, serve valid public policy considerations and can be pro-consumer. In selling an automobile-service bundle, the independent dealership may have better incentives with respect to consumer desires than does the manufacturer. As such, it is not unreasonable for state legislatures to choose a market design that best serves their constituents.

Keywords: Automobile, Competition, Intrabrand, Interbrand, Car Prices, Econometric, Antitrust

JEL Classification: L62

Suggested Citation

Beard, T. Randolph and Ford, George S., State Automobile Franchise Laws: Public or Private Interests? (July 12, 2016). Phoenix Center Perspectives 16-06 , Available at SSRN: https://ssrn.com/abstract=2913120 or http://dx.doi.org/10.2139/ssrn.2913120

T. Randolph Beard

Auburn University

415 West Magnolia Avenue
Auburn, AL 36849
United States

George S. Ford (Contact Author)

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
14
Abstract Views
228
PlumX Metrics