Parallel imports and repair services

Jota Ishikawa, Hodaka Morita and Hiroshi Mukunoki

Journal of Economic Behavior & Organization, 2020, vol. 172, issue C, 137-160

Abstract: This study explores the welfare effects of parallel imports when the producer may refuse to provide repair services for parallel imported units, which reduces the degree of price convergence between countries. If the probability of the product’s breakdown is endogenously determined by the producer, permitting parallel imports could increase the probability, because a higher probability leads to a larger price gap. As a result, it is possible that prices increase and welfare deteriorates in both countries. This negative welfare effect is more likely to emerge as the liberalization of trade in goods proceeds. The prohibition of service discrimination recovers the positive welfare effect.

Keywords: Parallel imports; Service discrimination; Product quality; Welfare; Trade liberalization (search for similar items in EconPapers)
JEL-codes: D42 F10 F12 F13 L41 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268120300305
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Parallel Imports and Repair Services (2018)
Working Paper: Parallel Imports and Repair Services (2017)
Working Paper: Parallel Imports and Repair Services (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:172:y:2020:i:c:p:137-160

DOI: 10.1016/j.jebo.2020.01.024

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().