This paper describes the influence of Frederic M. Scherer in the field of Industrial Organization. The emphasis is on Scherer’s research with regard to vertical agreements between a manufacturer and its downstream vendors, with particular focus on Scherer’s writings about resale price maintenance (RPM). Scherer’s views on RPM agreements are contrasted with the Chicago school’s liberality and the Warren Court’s stringency, showing how Scherer staked out a middle ground. The paper also assesses the influence of Scherer in moving US antitrust policy from its historic stance of treating RPM as per se illegal to its current treatment under the rule of reason.
Keywords: Resale price maintenance, Chicago School, free rider, Leegin opinion
Jel Code: L42, B31