Pass-through, vertical contracts, and bargains

Germain Gaudin

No 202, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This paper analyzes the determinants of pass-through that are specific to vertical relationships between wholesalers and retailers. Fluctuations in input costs (due to, e.g., exchange rate shocks) are transmitted first to the wholesale price, and then to the retail price. The type of vertical agreement firms contract upon as well as their relative bargaining power are identified as major determinants of pass-through rates. The relationship between passthrough rates at the wholesale and retail levels is also investigated. Finally, the result of Bresnahan and Reiss (1985) on markup ratio is extended to the case where firms bargain over the wholesale price.

Keywords: Pass-through; Exchange Rate; Vertical contracting; Bargaining (search for similar items in EconPapers)
JEL-codes: F31 L11 L81 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/122185/1/839796404.pdf (application/pdf)

Related works:
Journal Article: Pass-through, vertical contracts, and bargains (2016)
Working Paper: Pass-through, vertical contracts, and bargains (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:202

Access Statistics for this paper

More papers in DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics (econstor@zbw-workspace.eu).