The effects of advertising on resale price maintenance

Miao-Ling Chen and Guan-Ru Chen

Applied Economics, 2007, vol. 39, issue 4, 453-459

Abstract: This research combines the market power and market competition perspectives on advertising, under the framework of a generalized theoretical model in minimum resale price maintenance (RPM), in order to investigate the effects of advertising on RPM using the real options approach. The effects of advertising on retail price will impact the value of RPM, further, influence the incentive of manufacturers to impose RPM. Through brand penetration and promotional pricing effects, advertising is likely to influence RPM under the condition of retail price competition. When the brand penetration effect is dominant, advertising will discourage manufacturers from imposing RPM. Advertising will encourage manufacturers to impose RPM when the promotional pricing effect is dominant. RPM not only substitutes advertising, but also complements advertising.

Date: 2007
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840500438863 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:applec:v:39:y:2007:i:4:p:453-459

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840500438863

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().