Vertical Price Control and Parallel Imports: Theory and Evidence Journal Article uri icon



  • AbstractThe paper analyzes parallel imports, or goods traded without the authorization of a trademark owner. Parallel imports have multiple causes, including vertical price control, which the authors model. A manufacturer selling its product through an independent agent sets the wholesale price sufficiently low to induce a desired retail price abroad. This permits the agent to sell the product profitably in the originating market. Combined social surplus decreases and then increases in the cost of parallel trade. Restricting parallel imports benefits the manufacturer, but could raise or reduce global surplus. The econometric analysis indicates that the verticalā€control explanation of parallel imports is important.

publication date

  • September 1, 2004

has restriction

  • green

Date in CU Experts

  • July 11, 2014 11:38 AM

Full Author List

  • Maskus KE; Chen Y

author count

  • 2

Other Profiles

International Standard Serial Number (ISSN)

  • 0965-7576

Electronic International Standard Serial Number (EISSN)

  • 1467-9396

Additional Document Info

start page

  • 551

end page

  • 570


  • 12


  • 4