The Effects of Retail Regulations on Prices: Evidence from the Loi Galland

Pierre Biscourp, Xavier Boutin and Thibaud Vergé ()
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Pierre Biscourp: ENSAE

Documents de Travail de la DESE - Working Papers of the DESE from Institut National de la Statistique et des Etudes Economiques, D3E

Abstract: In 1997, a new legislation banning below-invoice retail prices came into force in France. Individually negotiated discounts could no longer be passed on to consumers, which is equivalent to allowing industry-wide price floors. The anti-competitive effects of such practices are well-known. The elimination of intra-brand competition is expected to lead to a sharp increase in the retail prices. Using CPI raw data, we find evidence supporting this claim. The modification or revocation of the existing legislation (as it has been done in Ireland in December 2005) would then be expected to reduce retail prices.

Keywords: retail prices; pricing regulations; resale price maintenance (search for similar items in EconPapers)
JEL-codes: L42 L81 K23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind, nep-reg and nep-ure
Date: 2008-05, Revised 2008-05
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Persistent link: http://EconPapers.repec.org/RePEc:crs:wpdeee:2008-02

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