I show that when a firm's pricing is constrained to several price points (for example, if it has to end in 9.99), then on average the pass-through rate is the same as it would have been for an unconstrained firm facing the same demand and cost. I also show that when a firm has a sizable cost of...

The LeChatelier-Samuelson principle states that as a reaction to a shock, an agent's short-run adjustment of an action is smaller than the long-run adjustment of that action when the other related actions can also be adjusted. We extend the principle to strategic environments and define long run...