Two tales on resale

Felix Höffler and Klaus Schmidt ()

International Journal of Industrial Organization, 2008, vol. 26, issue 6, 1448-1460

Abstract: In some markets vertically integrated firms sell directly to final customers but also to independent downstream firms with whom they then compete on the downstream market. It is often argued that resellers intensify competition and benefit consumers, in particular when wholesale prices are regulated. However, we show that (i) resale may increase prices and make consumers worse off and that (ii) standard "retail minus X regulation" may increase prices and harm consumers. Our analysis suggests that this is more likely if the number of integrated firms is small, the degree of product differentiation is low, and/or if competition is spatial.

Keywords: Resale; regulation; Wholesale; Spatial; product; differentiation; Non-spatial; product; differentiation; Vertical; restraints (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Working Paper: Two tales on resale (2008)
Working Paper: Two Tales on Resale (2007)
Working Paper: Two Tales on Resale (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:26:y:2008:i:6:p:1448-1460

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