COST PASS THROUGH IN THE CASE OF SEQUENTIAL OLIGOPOLY: AN EMPIRICAL STUDY OF THE FLUID MILK MARKET
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We estimate the cost pass through rates (CPTR) in the Boston fluid milk market while taking into account strategic conduct (Vertical Nash, Vertical Stackleberg) between retailers and processors. By using structural demand and supply specification we estimate and test for the pass through rates at different stages of fluid milk marketing channels. Processors have higher pass through rates than retailers.