The Impact of Maximum Markup Regulation on Prices

Christos Genakos, Pantelis Koutroumpis and Mario Pagliero

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Markup regulation is a common yet understudied type of regulation. We analyze the repeal of maximum wholesale and retail markup regulation in an oligopolistic and vertically non-integrated market. By comparing the prices of products affected by regulation before and after the policy change and using unregulated products as a control group, we find that abolishing regulation led to a significant decrease in both retail and wholesale prices. The results provide indirect but consistent evidence that markup ceilings provided a focal point for collusion among wholesalers.

Keywords: Markup regulation; focal point; collusion; ex-post policy evaluation (search for similar items in EconPapers)
JEL-codes: L0 L1 L4 L5 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://cep.lse.ac.uk/pubs/download/dp1310.pdf (application/pdf)

Related works:
Journal Article: The Impact of Maximum Markup Regulation on Prices (2018)
Working Paper: The impact of maximum markup regulation on prices (2015)
Working Paper: The Impact of Maximum Markup Regulation on Prices (2014)
Working Paper: The Impact of Maximum Markup Regulation on Prices (2014)
Working Paper: The Impact of Maximum Markup Regulation on Prices (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1310

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