caa a22 4500 60622324X CHVBK 20210128101137.0 cr unu---uuuuu 210128e20150301xx s 000 0 eng 10.1007/s11129-015-9154-1 doi (NATIONALLICENCE)springer-10.1007/s11129-015-9154-1 The effects of resale-below-cost laws in the presence of a strategic manufacturer [Elektronische Daten] [Noriaki Matsushima, Akira Miyaoka] In retail markets, below-cost (or loss-leader) pricing is an important marketing tool to attract customers. However, several countries have adopted resale-below-cost laws that ban retailers from adopting this promotion strategy. In this study, we theoretically investigate how banning below-cost pricing influences equilibrium prices, firms' profits, and consumer surplus. We explicitly consider not only horizontal competition between retailers but also vertical channel relationships between manufacturers and retailers. In addition, we focus on asymmetric competition between dominant and weak retailers, which have heterogeneous bargaining positions vis-à-vis an upstream manufacturer. We show that this ban induces the manufacturer to reduce its wholesale price and can lead to a decrease in equilibrium retail prices including that of a loss-leader product. We also show that owing to the effects of such price reductions, the ban always improves the total consumer surplus and can benefit the weak retailer in terms of bargaining position, although it always harms the manufacturer and the dominant retailer. Springer Science+Business Media New York, 2015 Below-cost pricing nationallicence Channel power nationallicence Resale-below-cost laws nationallicence Vertical relations nationallicence Matsushima Noriaki Institute of Social and Economic Research, Osaka University, 6-1 Mihogaoka, 567-0047, Ibaraki, Osaka, Japan aut Miyaoka Akira Institute of Social and Economic Research, Osaka University, 6-1 Mihogaoka, 567-0047, Ibaraki, Osaka, Japan aut Quantitative Marketing and Economics Springer US; http://www.springer-ny.com 13/1(2015-03-01), 59-91 1570-7156 13:1<59 2015 13 11129 https://doi.org/10.1007/s11129-015-9154-1 text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s11129-015-9154-1 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Matsushima Noriaki Institute of Social and Economic Research, Osaka University, 6-1 Mihogaoka, 567-0047, Ibaraki, Osaka, Japan aut NATIONALLICENCE 700 1- Miyaoka Akira Institute of Social and Economic Research, Osaka University, 6-1 Mihogaoka, 567-0047, Ibaraki, Osaka, Japan aut NATIONALLICENCE 773 0- Quantitative Marketing and Economics Springer US; http://www.springer-ny.com 13/1(2015-03-01), 59-91 1570-7156 13:1<59 2015 13 11129