Using the Economics of the Pass Through in Proving Antitrust Injury in Robinson-Patman Cases

Abstract

We analyze and summarize the microeconomic theory of pass-through rates. We start by analyzing a monopolist firm in a standard Micro 101 frictionless market, then add more nuances to the model, including, but not limited to oligopolistic competition, menu costs, price points, endogenous quality and package size choices, and consumer search costs, and show how each of these factors affects pass-through rates.