Frederic M. Scherer on vertical agreements: staking out the middle ground on resale price maintenance

Journal title ECONOMIA E POLITICA INDUSTRIALE
Author/s Kenneth G. Elzinga
Publishing Year 2014 Issue 2014/1
Language English Pages 15 P. 105-119 File size 57 KB
DOI 10.3280/POLI2014-001006
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

This paper describes the influence of Frederic M. Scherer in the field of Industrial Organization. The emphasis is on Scherer’s research with regard to vertical agreements between a manufacturer and its downstream vendors, with particular focus on Scherer’s writings about resale price maintenance (RPM). Scherer’s views on RPM agreements are contrasted with the Chicago school’s liberality and the Warren Court’s stringency, showing how Scherer staked out a middle ground. The paper also assesses the influence of Scherer in moving US antitrust policy from its historic stance of treating RPM as per se illegal to its current treatment under the rule of reason.

Keywords: Resale price maintenance, Chicago School, free rider, Leegin opinion

Jel codes: L42, B31

  1. Bork R.H. 1978. The Antitrust Paradox: A Policy at War with Itself. Basic Books: New York.
  2. Breit W., Ransom R.L. 1998. The Academic Scribblers. Princeton University Press: Princeton.
  3. Comanor W.S. 1985. Vertical price fixing and market restrictions and the new antitrust policy. Harvard Law Review, 98: 983-1102, DOI: 10.2307/1340882
  4. Comanor W.S., Scherer F.M. N.D. Supporting Neither Party. Brief for William S. Comanor and Frederic M. Scherer as amici curiae in the Supreme Court of the United States, Leegin Creative Leather Products, Inc. v. PKS, Inc., unpublished.
  5. Continental T.V. Inc. V. GTE Sylvania Inc. 1977. 433 US 36, unpublished.
  6. Cooper J., Froeb L., O’Brien D., Vita M.G. 2005. Vertical antitrust policy as a problem of inference. International Journal of Industrial Organization, 23 (7-8): 639-664, DOI: 10.1016/j.ijindorg.2005.04.003
  7. Deneckere R., Marvel H., Peck J. 1996. Demand uncertainty, inventories, and resale price maintenance. Quarterly Journal of Economics, 111 (3): 885-913, DOI: 10.2307/2946675
  8. Doane M.J., Farris P.W., Umit Kucuk S., Maddux R.C. 2013. Retail free-riding: the case of the wallpaper industry. The Antitrust Bulletin Working Paper.
  9. Dr. Miles Medical Company v. John D. Park & Sons. 1911. 220 US 373, unpublished.
  10. Easterbrook F.H. 1984. Vertical arrangements and the rule of reason. Antitrust Law Journal, 53 (1): 135-173.
  11. Elzinga K.G., Mills D.E. 2008. the Economics of resale price maintenance, in Collins W.D. (ed.) Issues in Competition Law and Policy. American Bar Association Section of Antitrust law: Chicago.
  12. Klein B., Murphy K.M. 1988. Vertical restraints as contract enforcement mechanisms. Journal of Law & Economics, 31 (2): 265-297, DOI: 10.1086/467157
  13. Krueger A.O. 1974. the political economy of the rent-seeking society. American Economic Review, 64 (3): 291-303.
  14. Lafontaine F., Slade M.E. 2008. Exclusive contracts and vertical restraints: empirical evidence and public policy, in Buccirossi P. (ed.) Handbook of Antitrust Economics. MIT Press: Cambridge (Mass.).
  15. Leegin Creative leather Prods. Inc. v. PSKS, Inc. 2007. 551 US 877, unpublished.
  16. MacKay A., Smith D.A. 2013. The empirical effects of minimum resale price maintenance on prices and output. University of Chicago Working Paper.
  17. Marvel H., McCafferty S. 1984. Resale price maintenance and quality certification. RAND Journal of Economics, 13 (3): 346-359, DOI: 10.2307/2555443
  18. Marvel H., McCafferty S. 1985. The welfare effects of resale price maintenance. Journal of Law & Economics, 28 (2): 363-379, DOI: 10.1086/467090
  19. Matthewson F., Winter R. 1998. the law and economics of resale price maintenance. Review of Industrial Organization, 13 (1-2): 57-84, DOI: 10.1023/A:1007774803225
  20. Pitosfky R. 1983. In defense of discounters: the no-frills case for a per se rule against vertical price fixing. Georgetown Law Journal, 71: 1487-1495.
  21. Posner R.A. 1981. The next step in the antitrust treatment of restricted distribution: per se legality. University of Chicago Law Review, 48 (1): 6-26, DOI: 10.2307/1599350
  22. Scherer F.M. 1970. Industrial Market Structure and Economic Performance. Rand-Mcnally & Company: Chicago.
  23. Scherer F.M. 1983a. the economics of vertical restraints. Antitrust Law Journal, 52 (31): 687-707.
  24. Scherer F.M. 1983b. Panel discussion. Antitrust Law Journal, 52 (3): 687.
  25. Scherer F.M. 2004. Quarter Notes and Bank Notes: The Economics of Music Composition in the Eighteenth and Nineteenth Centuries. Princeton University Press: Princeton.
  26. Scherer F.M. 2008. Conservative economics and antitrust: a variety of influences, in Robert Pitofsky (ed.) How the Chicago School Overshot the Mark. Oxford University Press: new York, DOI: 10.1093/acprof:oso/9780195372823.003.0004
  27. Scherer F.M., Ross D. 1990. Industrial Market Structure and Economic Performance. Rand-Mcnally & Company: Chicago.
  28. Shaviro D. 2012. The Forgotten Henry Simons. new York University School of Law: New York.
  29. Spengler J.J. 1950. Vertical integration and antitrust policy. Journal of Political Economy, 58 (4): 347-352, DOI: 10.1086/256964
  30. Telser L.G. 1960. Why should manufacturers want fair trade? Journal of Law & Economics, 3 (1): 86-105, DOI: 10.1086/466564
  31. Telser L.G. 1990. Why should manufacturers want fair trade II? Journal of Law & Economics, 33 (2): 409-417, DOI: 10.1086/467211
  32. Tullock G. 1967. the welfare costs of tariffs, monopolies and theft. Western Economic Journal, 5 (3): 224-232.
  33. Veblen T. 1915. The Theory of the Leisure Class. Macmillan: London.
  34. Zimmerman A. 2012. Showdown over ‘showrooming’. Wall Street Journal Online, published online.

Kenneth G. Elzinga, Frederic M. Scherer on vertical agreements: staking out the middle ground on resale price maintenance in "ECONOMIA E POLITICA INDUSTRIALE " 1/2014, pp 105-119, DOI: 10.3280/POLI2014-001006