Working paper icon

Working paper

Cost pass-through under delegation

Abstract:

The rate of cost pass-through exceeds 50% under strategic delegation of decision-making to managers with sales revenue contracts - regardless of the number of firms in the industry and demand curvature. This contrasts sharply with profit-maximization, for which cost pass-through can take on any positive value. The key intuition is that firms under delegation act as if they faced more rivals than they actually do, thus pushing cost pass-through towards 100%. Cost pass-through with market sh...

Expand abstract
Publication status:
Published

Actions


Access Document


Files:

Authors


Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2008-10-01
Paper number:
404
Keywords:
Pubs id:
1144020
Local pid:
pubs:1144020
Deposit date:
2020-12-15

Terms of use


Views and Downloads






If you are the owner of this record, you can report an update to it here: Report update to this record

TO TOP