The paper challenges two conventional notions: that changes in costs are not completely pass-through to the customer, and that this pass-through is asymmetric (cost increases are more likely to be passed through than cost decreases). We show that what looks like incomplete pass-through can also be seen as the salespeople passing-through the cost over time, i.e., in later transactions. We also show that the asymmetry that has been reported in the literature depends on the price level at which a salesperson is operating and it can go in either direction.
Hernán A. Bruno is a Professor of Marketing and Digital Environment at the University of Cologne since September 2015. Before joining the University of Cologne, Professor Bruno was a faculty member at INSEAD in Fontainebleau, France (2008–2015) and at Erasmus University in Rotterdam, Netherlands (2007–2008). He holds a Master in Research and a Marketing Ph.D. from London Business School. Prior to his career in business academia, he was a researcher in Analytical Chemistry at the University of Buenos Aires and a consultant at McKinsey & Company. Professor Bruno models marketing phenomena using tools from statistics and economics. His models attempt to discover hidden patterns in marketing data. These models can be applied as a support in marketing decision making or used to generate insights into basic marketing phenomena. His work has been published in leading marketing journals, such as Marketing Science and Journal of Marketing Research.