Consumer Search,Collusion And Resale Price Maintenance

The traditional conspiracy theory believes that conspiracy behavior is harmful to social welfare,and in recent years,there has been literature indicating that conspiracy may bring benefits to social welfare.This thesis studies the collusion effect among retailers under asymmetric product advantages,and finds that collusion enables manufacturers to increase prices,but also enables two competing manufacturers to choose to sell in the same market,thereby saving consumer search costs and expanding market demand.Therefore,collusion may harm consumer welfare due to price increases,or improve consumer welfare due to savings in consumer search costs,depending on specific conditions.Therefore,this article provides a new explanation for the welfare effect of collusion.In the case of price competition,assuming that there are high cost retailers H and low cost retailers L in the upstream,as well as two types of consumers with high search and low search costs,retailers H and L have two sales modes:"together sales",where two retailers are in the same market and both sides reach a collusion;"Separate sales"means that two retailers are in a monopoly position in different markets.By comparing and analyzing two different sales models,it is found that the proportion of consumers with high search costs compared to"separate sales"When a certain threshold value is reached,the"together sales"model can improve consumer welfare,even when satisfying₂^*+*≥^*Under the condition that collusive pricing is less than the average value of monopoly pricing,there is an improved solution for the respective profits of retailers and their corresponding equilibrium output during"together sales".In the case of production competition,there are also two sales modes:"together sales"and"separate sales".The final pricing in the market depends on the total production in the market.Comparative analysis of these two different sales models also found that compared to"separate sales",the proportion of consumers with high search costsWhen a certain threshold value is reached,the"together sales"model can achieve improved consumer welfare,and when collusive pricing is less than the average of monopoly pricing₂^′*+′*≥^′*(^′*+^′*),there exists an improvement solution for the respective profits of retailers and their corresponding equilibrium output when"folck together sales".Considering that there are too many related reference coefficients and the equilibrium obtained is complex,in order to ensure the scientificity of the result,a specific function simulation using matlab 2022Ra software is used to more intuitively prove that there is indeed a situation where the equilibrium solution is dominant under the collusion of production competition and folck together.Due to the ability to eliminate pricing uncertainty,save consumer search costs,attract more consumers to the market,and potentially improve consumer welfare in the context of collusive sales in togethers,it is also possible to achieve improvements in retailer profits when the increase in the number of consumers can compensate for the loss of profits caused by weakening competition.When manufacturers realize that fierce competition between them can incur heavy losses,it is better to reach an agreement between them to maintain prices at a higher level,so that both parties can avoid losses caused by competition.This is the reason why collusion is common in the market.In order to maintain the collusion effect,manufacturers often use resale price maintenance RPM vertical constraint tools.Therefore,we will discuss how to effectively maintain collusion among retailers using the vertical constraint tool RPM under two different competition modes,and find that both folck together and separate sales can achieve retailer collusion,thereby improving consumer welfare.Finally,based on the theoretical analysis of this article,relevant policy recommendations are given.After the Leegin case,the application of the principle of reasonableness to RPM has become a trend.Making rapid and accurate efficiency judgments on RPM in different situations is one of the most important tasks faced by the antitrust judicial department in policy operations.The consumer search behavior and retailer decision-making behavior studied in this article have improved solutions for consumer welfare under collusive sales,which have a certain impact on the judgment of the rationality of RPM implementation.Therefore,when judging whether the implementation of RPM is reasonable,relevant departments need to adopt a cautious attitude,using the analysis of consumer search costs,retail sales strategies,and the relationship between collusion and the implementation of RPM as an important reference factor.Therefore,this study can provide a reference for antitrust agencies to identify the principles of reasonableness applicable to RPM,and has clear antitrust policy significance.