Abstract
Retailers typically sell many different products from the same manufacturer at the same price. I consider managerial menu costs as an explanation for this uniform pricing puzzle, using a structural model to estimate the counterfactual profits that would be lost by a retailer switching from a non-uniform to a uniform pricing regime in the carbonated soft drink category. The results suggest that when a retail store faces even a relatively small cost to determine optimal non-uniform prices, it may be optimal to charge the same price for many products.
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