Local regulation generates price differentials between countries that stimulate arbitrage by international distributors, which motivates vertical price-squeeze or non-price discrimination strategies by manufacturers. We show that: i) under either regulatory commitment or discretion, there are no monotonic relationships between technology/market conditions and the first-mover’s pricing; ii) regulators manipulate parallel exports to improve local welfare by imposing public service obligations on distributors; iii) to prevent sabotage, regulation should provide manufacturers with adequate countervailing incentives; iv) coordinating national agencies alleviates negative regulatory and market externalities. Thus, local regulation within regional exhaustion of intellectual property rights might underestimate static and dynamic efficiency concerns.

Price Regulation and Public Service Obligations under International Arbitrage / Matteucci, Giorgio; Reverberi, Pierfrancesco. - (2005). (Intervento presentato al convegno Proceedings of the 31th Annual Conference of the European Association for Research in Industrial Economics-EARIE 2005 tenutosi a Porto; Portugal).

Price Regulation and Public Service Obligations under International Arbitrage

MATTEUCCI, Giorgio;REVERBERI, Pierfrancesco
2005

Abstract

Local regulation generates price differentials between countries that stimulate arbitrage by international distributors, which motivates vertical price-squeeze or non-price discrimination strategies by manufacturers. We show that: i) under either regulatory commitment or discretion, there are no monotonic relationships between technology/market conditions and the first-mover’s pricing; ii) regulators manipulate parallel exports to improve local welfare by imposing public service obligations on distributors; iii) to prevent sabotage, regulation should provide manufacturers with adequate countervailing incentives; iv) coordinating national agencies alleviates negative regulatory and market externalities. Thus, local regulation within regional exhaustion of intellectual property rights might underestimate static and dynamic efficiency concerns.
2005
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/55942
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