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- Title
EMPIRICAL EVIDENCE ON THE ROLE OF NONLINEAR WHOLESALE PRICING AND VERTICAL RESTRAINTS ON COST PASS-THROUGH.
- Authors
Bonnet, Celine; Dubois, Pierre; Boas, Sofia B. Villas; Klapper, Daniel
- Abstract
How a cost shock is passed through to final consumer prices may relate to nominal price stickiness and rigidities, the existence of nonadjustable cost components, strategic markup adjustments, or other contract terms along the supply distribution chain. This paper presents a simple framework to assess the potential role of nonlinear pricing contracts and vertical restraints, such as resale price maintenance or wholesale price discrimination in the supply chain, in explaining the degree of pass-through from upstream cost shocks in the ground coffee category to downstream retail prices. We find that resale price maintenance increases pass-through rate.
- Subjects
WHOLESALE prices; NONLINEAR pricing; ECONOMIC shock; CONSUMER goods sales &; prices; PRICE markup; SUPPLY chain management; PRICE discrimination; PRICE maintenance; COFFEE sales &; prices; ECONOMICS
- Publication
Review of Economics & Statistics, 2013, Vol 95, Issue 2, p500
- ISSN
0034-6535
- Publication type
Article
- DOI
10.1162/REST_a_00267