Resale Price Maintenance by Japanese Newspapers

Abstract

In Japan, newspapers enjoy a special exemption from antimonopoly prohibitions against resale price maintenance (suppliers’ stipulations that bar downstream firms from price discounting). But if a newspaper company does stipulate retail prices, it is required to set uniform prices throughout Japan. Econometric analysis here shows that Japanese newspaper subscription prices are far below the levels that would maximize joint profit, given the newspaper content. The authorized resale price maintenance seems to have a motivation other than cartelization.

Keywords: resale price maintenance, two-sided markets, newspapers, advertising

JEL Classification: D4, L4