The Analysis Of Enforcement Mechanism Of Resale Price Maintenance

Resale price maintenance(RPM),also known as vertical price restraint,refers to upstream producers restricting retailers' final retail prices through various means such as applying pressure and setting conditions.In recent years,RPM has attracted extensive attention from scholars around the world.Scholars' research on RPM focuses more on whether RPM promotes or decreases efficiency,but neglects whether it can be implemented after RPM is signed and on which mechanism it depends on.Therefore,from the point of view of RPM implementation mechanism,this paper discusses RPM in more depth.Firstly,the RPM self-implementation mechanism is discussed.The author shows that RPM is a mechanism for producers to self-constrain their own opportunistic behavior.Under this mechanism,manufacturer can constrain its opportunistic behavior by implementing RPM and maintain market power.Then,the author analyzes the mechanism of RPM as a risk sharing device in the retail market,which allows retailers to reserve sufficient inventory in case of uncertain demand.Next,the mechanism of how market forces can drive RPM implementation is discussed.The RPM self-implementation mechanism is analyzed from two aspects,which are the influence of the retail market forces and the market forces of the manufacturers:In the retail market power-driven mechanism,the retailer achieves collusive outcome;under the producer-driven mechanism,the manufacturer uses RPM to make retailers provide the quality certification services needed by the market.Secondly,RPM and contract-breaching constraints is analyzed.In cases where RPM cannot be self-enforced,RPM implementation is facilitated by the introduction of penalties and profit sharing strategies.First,the author analyzes how the implementation of RPM contracts can be facilitated by introducing penalties.At the time of signing the contract,when the services provided by the retailer are observable and quantifiable,the combination of the penalty strategy and the refusal to deal allows the retailer to deviate on the penalty greater than the benefit of deviation,thus ensuring the implementation of the RPM.Second,the author analyzes how profit sharing strategies facilitates the implementation of RPM contracts.At the time of signing the contract,when the services provided by the retailers are not quantifiable,the introduction of profit sharing strategies combined with refusal to deal can result in the retailer breaching losses being greater than the breaching profits,thereby facilitating the implementation of RPM if RPM itself has inefficient enforcement forces.Finally,the main research results of this paper are summarized,and the research direction of future RPM implementation mechanism is prospected.