The impact of maximum markup regulation on prices
Christos Genakos, Pantelis Koutroumpis and Mario Pagliero
Markup regulation is a common, yet understudied type of regulation. We analyze the repeal of maximum wholesale and retail markup regulation in an oligopolistic and vertically nonintegrated market. By comparing the prices of products affected by regulation before and after the policy change and using unregulated products as a control group, we find that abolishing regulation led to a significant decrease in both retail and wholesale prices. Our analysis provides indirect but consistent evidence that markup ceilings provided a focal point for collusion among wholesalers. ? 2018 The Editorial Board of The Journal of Industrial Economics and John Wiley & Sons Ltd
1 June 2018
The Journal of Industrial Economics 66(2) , pp.239-300, 2018
http://eprints.lse.ac.uk/60533/
This Journal article is published under the centre's Growth programme.