search query: @indexterm Franchising / total: 231
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| Author: | Perry, M. K. Besanko, D. |
| Title: | Resale price maintenance and manufacturer competition for exclusive dealerships |
| Journal: | Journal of Industrial Economics
1991 : SEP, VOL. 39:5, p. 517-544 |
| Index terms: | BRANDS RETAILING COMPETITION PRICES RETAIL PRICING WHOLESALING FRANCHISING |
| Language: | eng |
| Abstract: | Two manufacturers distribute their brands through exclusive retail dealers, and must compete for consumers indirectly by inducing retailers to carry their brands. Equilibrium outcomes with and without resale price maintenance (RPM) are compared. Maximum RPM lowers the retail price if manufacturers cannot employ franchise fees. Minimum RPM raises the retail price if manufacturers cannot set a wholesale price above marginal cost and must employ only a franchise fee. However, these traditional insights are reversed if manufacturers can set both a wholesale price and a franchise fee in the equilibrium without RPM. These results are reexamined in the Appendix, using a logit model for differentiation of brands and retailers. |
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