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Shih-Heng Pao
Shu-Hui Chang



Authors and WSEAS

Shih-Heng Pao
Shu-Hui Chang


WSEAS Transactions on Business and Economics


Print ISSN: 1109-9526
E-ISSN: 2224-2899

Volume 14, 2017

Notice: As of 2014 and for the forthcoming years, the publication frequency/periodicity of WSEAS Journals is adapted to the 'continuously updated' model. What this means is that instead of being separated into issues, new papers will be added on a continuous basis, allowing a more regular flow and shorter publication times. The papers will appear in reverse order, therefore the most recent one will be on top.

Volume 14, 2017


The Impact of RPM on Welfare Level under Competition between Supply Chains

AUTHORS: Shih-Heng Pao, Shu-Hui Chang

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ABSTRACT: In Resale Price Maintenance (RPM) contracts, the manufacturer specifies the resale price that retailers must charge to consumers. The aim of the research is to investigate the role of using a RPM contract in a market where there are two competitive chains with demand uncertainty. We find that under the insignificant difference between high and low primary market demand and high degree of substitution between the two competitive products, after vertical integration of firms in every single chain adopting RPM strategy can enhance the social welfare level from disintegrated chain using the clearance pricing strategy.

KEYWORDS: Resale price maintenance; retail competition; the flexible pricing strategy; the optimal pricing strategy; welfare level; consumer surplus.

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WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 14, 2017, Art. #43, pp. 417-427


Copyright © 2017 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution License 4.0