Minimum Resale Price Maintenance: Some Empirical Evidence from Maryland

Abstract

On October 1, 2009, the State of Maryland enacted a statute that prohibits the use of minimum resale price maintenance (RPM). This was in response to the Supreme Court’s 2007 Leegin decision that held that RPM should be evaluated under the rule of reason rather than be considered per se illegal. The Maryland statute provides a natural experiment that can be used to analyze the effect of RPM on retail prices. We analyze the effect of the statute on video game prices in Maryland. Video games were used for this analysis because video game manufacturers have been known to impose RPM. Employing a difference-in-differences approach, we find no effect of the Maryland statute on video game prices.