scholarly journals Raising Retailers’ Profits: On Vertical Practices and the Exclusion of Rivals

2014 ◽  
Vol 104 (2) ◽  
pp. 672-686 ◽  
Author(s):  
John Asker ◽  
Heski Bar-Isaac
Keyword(s):  
Policy Implications ◽  
Resale Price Maintenance ◽  
Resale Price ◽  
Price Maintenance ◽  
Vertical Contracting

Resale price maintenance (RPM), slotting fees, loyalty rebates, and other related vertical practices can allow an incumbent manufacturer to transfer profits to retailers. If these retailers were to accommodate entry, upstream competition could lead to lower industry profits and the breakdown of these profit transfers. Thus, in equilibrium, retailers can internalize the effect of accommodating entry on the incumbent’s profits. Consequently, if entry requires downstream accommodation, entry can be deterred. We discuss policy implications of this aspect of vertical contracting practices. (JEL L14, L22, L25, L42, L81)

Argumentation of the Courts and Contemporary Legal Scholarship

2017 ◽  
Author(s):  
Adrian Kuenzler
Keyword(s):  
Case Law ◽  
Copyright Law ◽  
Court Case ◽  
Supply Side ◽  
Resale Price Maintenance ◽  
Goods And Services ◽  
Supreme Court Case ◽  
Resale Price ◽  
The One ◽  
Price Maintenance

This chapter analyzes existing U.S. Supreme Court case law with respect to, on the one hand, antitrust’s minimum resale price maintenance plans, bundling and tying practices, as well as refusals to deal, and, on the other hand, trademark law’s dilution, postsale, sponsorship, and initial interest confusion doctrines, including design patent and selected areas of copyright law. It demonstrates that courts, based on the free riding hypothesis, have come to protect increasing amounts of artificial shortage of everyday consumer goods and services and corresponding incentives to innovate. Through the preservation of such values, antitrust and intellectual property laws have evolved into “dilution laws” and have focused, almost exclusively, on the refurbishment of the technological supply side of our present-day digital economies rather than also on the human demand side of “creative consumption.”

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