Minimum Resale Price Maintenance: Empirical Evidence from Maryland
25 February 2010
By Dr. Elizabeth M. Bailey with former NERA economist Dr. Gregory K. Leonard
On 1 October 2009, the State of Maryland enacted a statute prohibiting the use of minimum resale price maintenance (RPM). This was in response to the Supreme Court's 2007 Leegin decision that held that minimum RPM should be evaluated under the rule of reason rather than be considered per se illegal. This article from The B.E. Journal of Economic Analysis & Policy uses the Maryland statute as a natural experiment to analyze the effect of minimum RPM on retail prices. The authors analyze the effect of the statute on retail video game prices, as video game manufacturers historically have used minimum RPM. Employing a difference-in-differences approach, the authors find no effect of the Maryland statute on video game prices.
