We examine the problem of parallel imports: unauthorized flows of products across countries, which compete with au- thorized distribution channels. The traditional economics model of a discriminating monopolist that has different prices for the same good in different markets requires the markets to be separated in some way, usually geographi- cally. The profits from price discrimination can be threatened by parallel imports that allow consumers in the high-priced region some access to the low-priced marketplace. However, as this article shows, there is a very real possibility that par- allel imports may actually increase profits.
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