Working Papers

Upstream Quantity Discounts and Double Marginalization in the New York Liquor Market

This paper exploits a unique data set of price schedules to provide the first empirical estimate of the welfare impact of second degree price discrimination in an intermediate goods market. Theoretical welfare predictions in such a context are ambiguous and depend on retailer pass through of input cost discounts to consumers and the distribution of retailer purchase size. I estimate a structural model of the New York retail liquor market where wholesalers offer a multi-part nonlinear tariff for each product. I find that banning quantity discounts reduces total welfare by approximately 13% on average.

Work in Progress

“All Unit Discounts as a Price Discrimination Mechanism”