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Resale price maintenance: A managerial perspective
Author(s) -
Blair Roger D.,
Whitman Joseph
Publication year - 2018
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2920
Subject(s) - prestige , resale price maintenance , certification , promotion (chess) , product (mathematics) , business , quality (philosophy) , perspective (graphical) , industrial organization , key (lock) , marketing , microeconomics , economics , management , incentive , computer science , philosophy , linguistics , geometry , mathematics , computer security , epistemology , artificial intelligence , politics , political science , law
Managers can improve firm profits by selecting the appropriate pricing strategy. In this article, we show how managers can use one particular controversial pricing strategy—resale price maintenance (RPM)—to enhance firm profits. We first discuss the antitrust treatment of RPM, both in the United States and internationally. Then we examine the economic effects of implementing RPM in several key contexts: product promotion, quality certification, prestige goods, and online retail. We also discuss the effects of RPM on entry of new firms.