"I'll Sell It to You at Cost": Legal Methods to Promote Retail Markup Disclosure (with F. Clayton Miller), 84 Northwestern University Law Review 1047 (1990)
In today's marketplace, retailers provide consumers with a wealth of information about the prices, qualities, and uses of their products. Conspicuously absent, however, is information about the retailer's cost or markup. Retail sellers are generally unwilling to tell a buyer the wholesale cost of the goods they sell. To be sure, there are counter-examples. Some car dealers, for instance, promise to sell their cars for "$1 over dealer's cost." Yet, because such representations are almost certainly false, these very examples serve only to highlight the problem. In a limited number of markets, consumers value cost information but the competitive market process does not provide it in any credible fashion.
This Article examines whether consumer protection laws should be used to promote markup disclosure. Our goals are (1) to identify the markets in which consumers will most value markup information; (2) to show how markup competition could increase equity and efficiency by decreasing retail price dispersion and by substituting for consumer search; and (3) to suggest why competitive markets might not supply the information that consumers and society value.
Date of Authorship for this Version
Ayres, Ian, ""I'll Sell It to You at Cost": Legal Methods to Promote Retail Markup Disclosure" (1990). Faculty Scholarship Series. Paper 1542.