Everyone (do you mean every economics blog you read? that too) is talking about a possible rollback of the anti-trust laws. Specifically allowing manufacturers to set price floors. Even Mankiw thinks it's a good idea.
To which I can only say: Are they nuts?
The electronic stores that are the most expensive, generally speaking, have terrible service. Unlike the bored and/or indifferent help at a lower end retailer their sales help is uninformed and pushy.
Assume the producer sets a price floor, and you now can afford to spend more on sales staff. You have three options
1. Do nothing pocket the extra cash as profit
2. Hire aggressive sales staff and give them bigger commissions
3. Hire knowledgeable and polite sales staff and reward them based on the quality of service they provide
It is -possible- that retailers will choose 3. but I'm doubtful.
2007/03/27
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