We develop a reduced-form model of price transmission in a vertical sector, allowing for refined asymmetric …, contemporaneous and lagged, own and cross-price effects under time-varying volatility. The model is used to investigate the wholesale …-retail price dynamics in the U.S. butter market. The analysis documents the nature of nonlinear price dynamics in a vertical sector …

Weekly retail gasoline prices in Windsor, Ontario, from 1989 to 1994 appear to respond faster to wholesale price … reconcile these observations through a model of price cycles. Prices on the downward portion of the cycle appear insensitive to … costs, compared with price increases, supporting the theory that price decreases result from battles over market share. This …