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Working Paper
Firm-Level Pass-Through of Supply Chain Disruptions: Insights from the U.S. Beef Market
We leverage a fire outbreak that caused a large but temporary capacity loss at the largest U.S. beef packer to study how firm conduct shapes the pass-through of supply disruptions along the supply chain. Despite evidence of industry-wide increases in processing costs, retail prices for the affected packer’s products fell. To rationalize this pattern, we develop a model of bilateral retailer-packer bargaining that accounts for reliability of product delivery. The model highlights how disruptions alter bargaining leverage and shift margins between buyer and seller. Counterfactual simulations ...