A Brief Review and Assessment of the Leegin Decision: Who Wins and Who Loses When Manufacturers Are Free to Set Retail Prices?

For decades, it has been a per se violation of U.S. antitrust law for manufacturers or distributors to specify retail selling prices. In the spirit of atomistic, unrestrained competition, retailers were free to set prices without undue interference from upstream channel participants. Attempts by manufacturers or other channel participants to restrict retail price setting initiatives were viewed by regulators as an unwarranted and illegal interference with the market mechanism. Restrictions on price setting initiatives would, it was argued, lessen competition and ultimately raise prices above competitive levels to the detriment of consumers. Recently, under the leadership of newly appointed Chief Justice Roberts, a more “business friendly” Supreme Court has reversed this policy; vertical price fixing is no longer a per se violation of U.S. antitrust law. By a five‐to‐four margin, the Court held in Leegin Creative Leather Products that manufacturers could, under certain circumstances, establish binding retail selling prices. Henceforth, retail price setting restrictions will be subject to a rule of reason evaluation whereby price restrictions will be assessed on a case‐by‐case basis. Proponents of the now‐legal restrictions argue that this will ensure that merchandise sold through retail outlets will receive needed support, free riding will be reduced or eliminated, and new brand introduction will be facilitated. Critics argue that the Court's decision marks a return to the days of fair trading; marginal firms will be protected, so‐called “inframarginal consumers” will be forced to pay for services they do not want or need, and prices for many branded products will rise, all to the detriment of consumer welfare.     

A RECONSIDERATION OF THE ‘GREAT RATIOS’ OF ECONOMICS

Autocorrelations are found in the disturbance terms of regressions employed by L. R. Klein and R. F. Kosobud in a global model of growth employing five celebrated ratios of economics. This paper summarizes the Klein-Kosobud conclusions, modifies them by removing the autocorrelations, and extends the model to include more recent years. The modified conclusions hold even with the added observations.     

THE EFFECT OF RETAIL PROMOTIONAL ACTIVITIES ON SALES*

This article reports the formulation and results of a multiple equation econometric model to relate retail sales by brand and package size to retail promotional variables for a branded, frequently purchased grocery product. Primary emphasis is placed on the formulation of the model as opposed to the results obtained from its use.     

Does Time of Voting Affect Exit Poll Results?

This study analyzes time of voting effects on the results ofexit poll data collected in a Cleveland municipal tax referendum.The data reveal significant differences both in the times differentgroups vote and in the reported levels of support for the taxlevy by time of day. The temporal variation in the reportedlevels of support for the tax levy are then shown to be directlyrelated to the times when different support groups cast theirballots. Collectively, these findings suggest the need for day-longinterviewing in the design of exit polls.     

The Structure and Stability of Political Attitudes: Findings from the 1974-76 Dearborn Panel Study

This article examines the structure and stability of publicopinion between the 1972 and 1976 presidential elections. Thedata consist of a four-wave panel study of 800 residents inDearborn, Michigan; interviews were conducted in the springof 1974, 1975, and 1976 and in the fall of 1976 immediatelyafter the presidential election. The paper focuses on the structureof political attitudes, the stability of attitudes, and theimpact of attitudes on the presidential votes. A central thesisis that public opinion can be disaggregated into two clusters—theDisintegration Cluster and the Alignment Cluster—one ofwhich disrupts and one of which reinforces partisan voting.On the basis of correlations between the seven factors makingup the clusters, we anticipate neither a rapid realignment nora disintegration of the party system, but instability, withelection outcomes affected by attitudinal factors salient toa specific campaign. We find signs of increased crystallizationof political attitudes compared to the 1956–1958–1960national panel. Finally, our voting studies indicate that theDisintegration Cluster had a significant effect on the 1972election, but that issues in general had little impact in 1976,once controls were introduced for party identification and candidateimage.     

TAXES AND EXPENDITURES IN THE U.S.: PUBLIC OPINION SURVEYS AND INCIDENCE ANALYSIS COMPARED

The usefulness of surveys for eliciting fiscal opinions of voters is investigated. Using data from the U.S. Advisory Commission in Intergovernmental Relations annual surveys of attitude toward government and taxes, the survey responses are related to economic and political factors and the survey results compared to those predicted by incidence analysis. The results from this analysis and a review of previous studies of this type suggest that there is often no consistent economic foundation for answers to fiscal survey questions. It also appears that some standard survey questions are too general to produce precise estimates of the factors influencing responses.     

IMMATERIAL REWARDS AND SANCTIONS IN A VOLUNTARY CONTRIBUTION EXPERIMENT

In this article, we compare the causes and effects of immaterial rewards and sanctions on cooperation in a voluntary contribution experiment. It appears that both rewards and sanctions increase contributions (and that rewards are more effective than sanctions) only when subjects interact repeatedly within the same group. The effect is, however, insignificant, which could be due to the higher variance in presence of rewards and sanctions. Furthermore, it is evidenced that rewards have some negative effect on the future contribution for both the imposer and the imposed when the partner matching is applied, but both rewards and sanctions have mainly positive effects under the stranger matching. Thus it seems that the recipient of the feedback takes the message as a reliable external evaluation of her contribution only under the stranger matching protocol when the strategic use of feedback can largely be excluded. (JEL C92, H41)