Competitive Effects of Resale Price Maintenance Through Inventory: Evidence from Publishing Industry

Kohei Kawaguchi, Jeff Qiu and Yi Zhang

No wma6p, SocArXiv from Center for Open Science

Abstract: This paper examines the competitive effects of resale price maintenance (RPM) through inventory decisions under demand uncertainty. We focus on the Japanese publishing industry where RPM is allowed. We develop and estimate a model of RPM in which price and inventory are determined before demand is realized. Counterfactual simulations show that the RPM model would yield a higher consumer surplus than a wholesale model due to a sufficient inventory and a lower price of new titles. Moreover, we show that the price ceiling due to RPM plays a welfare-enhancing role, whereas the price floor is irrelevant in the industry.

Date: 2022-11-29
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:wma6p

DOI: 10.31219/osf.io/wma6p

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