Consumer Search,Expected Price And Resale Price Maintenance

Resale price maintenance(RPM)is an agreement between manufacturer and retailers in attempting to control the retail price of its products or services.Although the case of RPM emerge one after another at home and abroad,RPM can not been given an accurate judgment due to its advantages or disadvantages,whether in China or in Europe,whether academic or judicial practice.Therefore,the study of RPM is very important both in theory and practice.There are a lot of theoretical researches on RPM,but almost all of them are based on the traditional demand function,and do not take into account the impact of the two important factors of consumer search and expected price on RPM research.Therefore,this paper attempts to introduce the expected price in the standard consumer search theory,and analyzes the legal conditions of RPM implementation.First of all,this paper theoretically studies the RPM,consumer search and expected price to explore the impact of consumer search and expected price on RPM implementation.The traditional research on RPM is mostly based on the traditional demand function,and few people take into account the impact of consumer search costs on the RPM equilibrium.However,the theory of consumer search shows that the search behavior of consumers and the search cost of consumers will have a great impact on the equilibrium of the market.In addition,when consumers search costs are very high,consumers are expected to determine the amount of the purchase price.It is clear that the introduction of consumer search and expected price will have a profound impact on the study of RPM.Secondly,this essay analysts the market equilibrium with the implement of RPM and without the implement of RPM,and compares the influence of different search costs for the equilibrium and different influence of search costs for RPM social welfare through the establishment of a standard of homogeneity of search model,and the introduction of the expected price.The results show that higher search costs lead to higher market equilibrium prices,resulting in lower consumer surplus.In addition,through the introduction of heterogeneous consumer search this reality condition,this essay makes certain modification of the homogeneity of model,namely there are two types of consumers in market,one is the high cost of consumer search,the other is the low cost of consumer search.Under the heterogeneous search model,this paper analyses the the market equilibrium with the implementation of RPM and without the implementation of RPM,and compares the influence of the market equilibrium and social welfare of RPM under different proportion of two kinds of consumers.It is found that the implementation of RPM is beneficial to the manufacturer in the context of the heterogeneity of consumers,but the effect of RPM on the consumers is related to the proportion of the two types of consumers.Although this theory is set up under the strict assumptions of the model and it can not be used to explain to consumers without taking expected price as the basis for decision making due to the introduction of consumer search and expected price,the theoretical explanation of RPM is very strong in the case of the high cost of consumer search and consumer decision making on the basis of the expected price,such as the pharmaceutical market,the durable goods market.Finally,this paper draws the policy implications behind the theory.The analysis of RPM is not only from the manufacturer's point of view,but also fully taking into account the impact of consumer behavior on the rationality of RPM.As the research of consumer search behavior and consumer expected price decision behavior in this paper,they often have a huge impact on the RPM equilibrium,and then affect the rationality of the implementation of RPM.Therefore,the relevant departments need to adopt a cautious attitude and take the analysis of consumer search costs,the expected price and the implementation of RPM as an important reference factor in the judgment of implementation of RPM.