The razors-and-blades myth(s)

University of Chicago Law Review

Volumn 78, Issue 1, 2011, Pages 225-255

  Picker, Randal C ^a,b  

^a UNIVERSITY OF CHICAGO LAW SCHOOL   (United States)

^b ARGONNE NATIONAL LABORATORY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79955975392     PISSN: 00419494     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (110)

1. Bogus Blades, Time 35, 36 n (Sept 12, 1927).
2. Chris Anderson, Free: The Future of a Radical Price 11 (Hyperion 2009).
3. Id at 240.
4. See K.C. Gillette, Razor, US Patent No 775,134 (filed Dec 3, 1901)
5. (describing Gillete's first "Razor," which had a lampshade-shaped handle and a thin, double-edged disposable blade);
6. K.C. Gillette, Razor, US Patent No 775,135 (filed May 24, 1904) (depicting Gillette's improved model, which featured a slimmer handle and wider blade).
7. See Russell B. Adams, Jr, King C. Gillette: The Man and His Wonderful Shaving Device 57-58 (Little, Brown 1978) (noting that Gillette would-among other things -print warnings on blade and razor cartons, threatening to prosecute any dealer selling them for under $5, and would "keep vigilant eyes on [the dealers'] newspaper ads and store windows" for any evidence of price-cutting).
8. See Florian Heubrandner, Anja Lambrecht, and Bernd Skiera, Time Preferences and the Pricing of Complementary Durables and Consumables *13 (unpublished manuscript, July 2010), online at http://ssrn.com/abstract=1444782 (visited Nov 7, 2010) (arguing that where companies tie durable goods to nondurable goods, pricing for the durable goods cannot be below marginal cost if competitors can make competing, compatible nondurable goods).
9. See Gordon McKibben, Cutting Edge: Gillette's Journey to Global Leadership 20 (Harvard Business 1998) (reporting that, in 1921, "a host of competitors" stood ready to "hawk[] cut-rate imitations that would fit on Gillette handles just as well as Gillette blades").
10. See id (explaining that Gillette simultaneously slashed prices for old-style razors and introduced a premium "New Improved Razor" at the "familiar" -and high -$5 price).
11. See Adams, King C. Gillette at 151 (cited in note 5).
12. See Gillette to Obtain Auto Strop Razor, NY Times 37 (Oct 16, 1930) (noting the addition of five new members-including Gaisman and another Auto Strop representative-to Gillette's board);
13. Gaisman Heads Gillette, NY Times 31 (May 2, 1931) (reporting Gaisman's election to chairman of Gillette's board and executive committee).
14. 11 For a detailed look at shaving before the Gillette razor, see Robert K. Waits, Before Gillette-The Quest for a Safe Razor: Inventors and Patents, 1762-1901 (Lulu 2009).
15. See King Camp Gillette, Origin of the Gillette Razor, Gillette Blade 3, 3 (Feb 1918) ("It was in 1895, in my fortieth year, that I first thought of the razor.").
16. Montgomery Ward &Co Catalogue &Buyers' Guide No 57, Spring and Summer 1895 444 (Dover 1969).
17. Id at 444-45.
18. Id at 445.
19. Id.
20. See Frederic Kampfe and Otto F. Kampfe, Safety Razor, US Patent No 228,904 (filed May 8, 1880).
21. 1897 Sears Roebuck Catalogue 111 (Chelsea House 1968) (Fred L. Israel, ed).
22. US Patent No 775,134 (cited in note 4)
23. (depicting Gillette's first model); US Patent No 775,135 (cited in note 4) (reflecting Gillette's design improvements).
24. US Patent No 775,134 at 1 (cited in note 4).
25. Id.
26. See William E. Nickerson, The Development of the Gillette Safety Razor: Part I-Mr. Gillette's Invention, Gillette Blade 3, 4 (May 1918) (describing how sheet steel, unlike forged steel, can be "punched out of a plate, or cut off from a strip, and the expense of forging and hollow grinding [is thus] avoided").
27. See Kurt Moe, Interchangeable Blades, in The Razor Anthology 23, 23 (Knife World 1995) (describing different types of straight razors that had blades that could be switched out).
28. For a discussion of the pricing aspect of platform battles, see Annabelle Gawer and Michael A. Cusumano, How Companies Become Platform Leaders, 49 MIT Sloan Mgmt Rev 28, 33 (Winter 2008).
29. Gillette Co, We Offer a New Razor, System 299 (Oct 1903) (advertisement) ("Do not confuse this razor with any other you have ever seen or heard of. Its every detail is brand new.").
30. See McKibben, Cutting Edge at 26 (cited in note 7).
31. John Wanamaker, Here Are Five New Tailored Suits for Women, NY Times 4 (Aug 18, 1904) (advertisement).
32. John Wanamaker, A Stropless Safety Razor, NY Times 4 (Aug 18,1904) (advertisement).
33. See Montgomery Ward &Co Catalogue &Buyers' Guide No 73 615 (Fall 1904).
34. George B. Baldwin, The Invention of the Modern Safety Razor: A Case Study of Industrial Innovation, 4 Explorations Entrepreneurial Hist 73, 90 n 34 (1951).
35. Id at 96.
36. For a discussion of the sunk-cost fallacy, see N. Gregory Mankiw, Principles of Economics 297 (Thomson 3d ed 2004).
37. Russell Adams describes this in his wonderful Gillette biography. See Adams, King C. Gillette at 90 (cited in note 5) (calling the price change a "disastrous experiment"). Adams also quotes a 1906 company memorandum on the role of the blades in Gillette's business: "The greatest feature of the business is the almost endless chain of blade consumption, each razor sold paying tribute to the company as long as the user lives." Id.
38. Sears, Roebuck and Co Catalog No 126 960 (Spring 1913).
39. Adams describes the efforts Gillette took to use the legal system to maintain the $5 price. See note 5.
40. See Sears, Roebuck and Co Catalog No 116 402 (Fall 1906) ("Those who cannot hone blades themselves will find it cheaper and better to buy new blades when the blades which they buy with the razor become dull.").
41. Gem Cutlery Co, Gem Junior Safety Razors, Am Druggist &Pharmaceutical Rec 36 (Jan-June 1906) (advertisement) ("Just hand them out: they sell themselves.").
42. Gem Cutlery Co, Value of Appearance, Appleton's (Jan-June 1907) (advertisement).
43. See, for example, Gem Cutlery Co, Gem Junior Safety Razor, McClure's 115 (Oct 1907) (advertisement).
44. See Sears, Roebuck and Co Catalog No 117 772-76 (Spring 1908);
45. Sears, Roebuck and Co Catalog No 118 665-69 (Fall 1908);
46. Sears, Roebuck and Co Catalog No 118 377-80 (Spring 1909);
47. Sears, Roebuck and Co Catalog No 119 853-56 (Fall 1909);
48. Sears, Roebuck and Co Catalog No 120 880-82 (Spring 1910);
49. Sears, Roebuck and Co Catalog No 121 1038-40 (Fall 1910);
50. Sears, Roebuck and Co Catalog No 122 978 (Spring 1911);
51. Sears, Roebuck and Co Catalog No 123 1147-52 (Fall 1911);
52. Sears, Roebuck and Co Catalog No 124 870-71 (Spring 1912);
53. Sears, Roebuck and Co Catalog No 125 1129-32 (Fall 1912);
54. Sears, Roebuck and Co Catalog No 126 959-61 (Spring 1913);
55. Sears, Roebuck and Co Catalog No 127 733-35 (Fall 1913);
56. Sears, Roebuck and Co Catalog No 128 954-56 (Spring 1914);
57. Sears, Roebuck and Co Catalog No 129 1258-60 (Fall 1914);
58. Sears, Roebuck and Co Catalog No 130 842-44 (Spring 1915);
59. Sears, Roebuck and Co Catalog No 131 1300-05 (Fall 1915);
60. Sears, Roebuck and Co Catalog No 132 818-20 (Spring 1916);
61. Sears, Roebuck and Co Catalog No 133 992-93 (Fall 1916);
62. Sears, Roebuck and Co Catalog No 134 868-70 (Spring 1917);
63. Sears, Roebuck and Co Catalog No 135 1268-70 (Fall 1917);
64. Sears, Roebuck and Co Catalog No 136 887-89 (Spring 1918);
65. Sears, Roebuck and Co Catalog No 137 1321-23 (Fall 1918);
66. Sears, Roebuck and Co Catalog No 138 982-83 (Spring 1919);
67. Sears, Roebuck and Co Catalog No 139 1304-05 (Fall 1919);
68. Sears, Roebuck and Co Catalog No 140 984-85 (Spring 1920);
69. Sears, Roebuck and Co Catalog No 141 1244-45 (Fall 1920);
70. Sears, Roebuck and Co Catalog No 142 918-19 (Spring 1921);
71. Sears, Roebuck and Co Catalog No 143 1064-68 (Fall 1921).
72. 45 Sears Catalog No 126 at 961 (cited in note 38).
73. Gillette had even faced direct competition in the Gillette blades market proper but had successfully asserted its patent against the entrant. See Clark Blade &Razor Co v Gillette Safety Razor Co, 194 F 421, 423 (3d Cir 1912)
74. ("There is ... no real difference between the two [parties' razor] devices, and any apparent differences are ... possibly designed to circumvent the claims of the patent in suit.").
75. See text accompanying note 38.
76. Compare Sears Catalog No 117 at 776 (cited in note 44);
77. Sears Catalog No 118 at 669 (cited in note 44);
78. Sears Catalog No 118 at 380 (cited in note 44);
79. Sears Catalog No 119 at 856 (cited in note 44);
80. Sears Catalog No 120 at 882 (cited in note 44);
81. Sears Catalog No 121 at 1040 (cited in note 44);
82. Sears Catalog No 122 at 978 (cited in note 44);
83. Sears Catalog No 123 at 1150 (cited in note 44);
84. Sears Catalog No 124 at 872 (cited in note 44);
85. Sears Catalog No 125 at 1131 (cited in note 44);
86. Sears Catalog No 126 at 960 (cited in note 38)
87. with Sears Catalog No 127 at 735 (cited in note 44).
88. 220 US 373, 404-09 (1911) (holding that vertical price-fixing arrangements violate the Sherman Antitrust Act). Mark Lemley suggested this possibility at a workshop on this paper, and I confess that I had had the same question.
89. Gillette Co, Another Triumph of American Invention, Wall St J 11 (May 17, 1921) (advertisement).
90. Id (calling the Gillette "the most efficient shaving device known to men").
91. Id.
92. Id.
93. Sears Catalog No 143 at 1064 (cited in note 44).
94. For a discussion of the "freemium" business tactic, see Anderson, Free at 26-27 (cited in note 2) (explaining the "5 Percent Rule," an example of a "freemium" strategy employed in online commerce in which 5 percent of customers pay for the premium version of a site, in effect supporting the rest of the customers, who get the basic free version).
95. Gillette Co, The Commercial Romance of 1921, NY Times 13 (Nov 15, 1921) (advertisement).
96. Id (discussing the pioneering spirit of the new razor and its mass appeal, with one million new customers).
97. Id.
98. Gillette Safety Razor Co, Annual Report 8 (1921).
99. Id at 9 (explaining the board of directors' decision "to market the Old Type Gillette, with fewer Blades and in a different case, at greatly reduced prices" in 1921).
100. For more information about these blades, see Phillip L. Krumholz, Collector's Guide to American Razor Blades 92, 195, 204, 225 (Krumholz 1995);
101. Dale Justus, The Illustrated Com pendium of "Made in U.S.A." Razor Blades (CD-ROM 2010).
102. 1927 Edition of the Sears, Roebuck Catalogue 528 (Crown 1970) (Alan Mirken, ed).
103. Id.
104. See Henry J. Gaisman, Blade Holder, US Patent No 1,639,335, 1 (filed June 24, 1924) ("A particular feature of my invention is that a word or symbol, such as a trade-mark, may be outlined in the blade by means of apertures therein.").
105. See Adams, King C. Gillette at 147 (cited in note 5).
106. Gillette Co, The New Gillette Shave: Square Blade-Ends, Scientific Am 418 (June 1930) (advertisement).
107. Gillette Co, The New Gillette Shave: Six Vital Improvements, Boys' Life 33 (May 1930) (advertisement).
108. See Adams, King C. Gillette at 154-55 (cited in note 5).
109. See Gillette to Obtain Auto Strop Razor, NY Times at 37 (cited in note 10).
110. See, for example, Gillette and Auto-Strop, Economist 677 (Oct 11, 1930) ("Auto-Strop's chances of winning the suit were considered good. ... A merger offered a convenient solution of the difficulty.").