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Empirical evidence on the role nonlinear wholesale pricing and vertical restraints on cost pass-trough

Author

Listed:
  • Céline Bonnet

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

  • Pierre Dubois

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Sofia B. Villas Boas

    (UC Berkeley - University of California [Berkeley] - UC - University of California)

  • Daniel Klapper

    (Goethe-Universität Frankfurt am Main)

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.

Suggested Citation

  • Céline Bonnet & Pierre Dubois & Sofia B. Villas Boas & Daniel Klapper, 2013. "Empirical evidence on the role nonlinear wholesale pricing and vertical restraints on cost pass-trough," Post-Print hal-02643672, HAL.
    • Handle: RePEc:hal:journl:hal-02643672
    as

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