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The impact of maximum markup regulation on prices

Genakos, Christos, Koutroumpis, Pantelis and Pagliero, Mario (2015) The impact of maximum markup regulation on prices. CEP Discussion Papers (CEPDP1310). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Markup regulation is a common yet understudied type of regulation. We analyze the repeal of maximum wholesale and retail markup regulation in an oligopolistic and vertically non-integrated market. By comparing the prices of products affected by regulation before and after the policy change and using unregulated products as a control group, we find that abolishing regulation led to a significant decrease in both retail and wholesale prices. The results provide indirect but consistent evidence that markup ceilings provided a focal point for collusion among wholesalers.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2015 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification: L - Industrial Organization > L0 - General
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
L - Industrial Organization > L4 - Antitrust Issues and Policies
L - Industrial Organization > L5 - Regulation and Industrial Policy
Date Deposited: 17 Dec 2014 10:10
Last Modified: 15 Sep 2023 23:35
Funders: Economic and Social Research Council

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