IDEAS home Printed from https://ideas.repec.org/a/oup/jcomle/v10y2014i3p611-619..html
   My bibliography  Save this article

Pass-Through Rates When Firms Can Vary Package Sizes

Author

Listed:
  • Alexei Alexandrov

Abstract

I show that when firms can change the quantity of product offered in each package, the standard pass-through rate calculations need to be adjusted. In particular, if a firm’s cost increases, the firm decreases the quantity of the product offered and the price of the package, resulting in a negative pass-through rate. Calculating the pass-through rate using the per-unit quantity price restores the expected positive pass-through rate. The results are confirmed by many observations from the industry and continue to hold when firms offer a product line and engage in second-degree price discrimination.

Suggested Citation

  • Alexei Alexandrov, 2014. "Pass-Through Rates When Firms Can Vary Package Sizes," Journal of Competition Law and Economics, Oxford University Press, vol. 10(3), pages 611-619.
    • Handle: RePEc:oup:jcomle:v:10:y:2014:i:3:p:611-619.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/joclec/nhu014
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jcomle:v:10:y:2014:i:3:p:611-619.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/jcle .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.