Jump-Dealing and Resale Price Maintenance: An Offsetting Theory and Its Policy Implications

Yu Li , Feng Bo and Xu Zhiwei
Center for Economic Analysis of Law and Policy Evaluation, Tianjin University of Finance & Economics, Tianjin, China

Abstract:  Resale price maintenance (RPM) exerts both positive and negative influences on the market competition. Such duality and the consequent difficulties in presenting evidence have often become highly controversial issues in anti-monopoly law enforcement. We found that in reality, effects of jump-dealing and RPM can offset each other. This paper systematically proposed the offsetting theory of jump-dealing and RPM, and analyzed their policy implications for anti price monopoly, thus providing some simple principles and methods to the law enforcement against vertical price monopoly. This will not only reduce the possible “superfluous actions” in current law enforcement, but also help avoid compounded mistakes due to difficulties of enforcement.
Keywords: offsetting theory, resale price maintenance (RPM), jump-dealing (JD), price difference in distribution channels (PD), price monopoly

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