Different flavor, same price: The puzzle of uniform pricing for differentiated products. Working paper, Federal Trade Commission, Bureau of Economics

Retailers typically sell many different products from the same manufacturer at the same price. I consider managerial menu costs as an explanation for this uniform pricing puzzle, using a structural model to estimate the counterfactual profits that would be lost by a retailer switching from a non-uniform to a uniform pricing regime in the carbonated soft drink category. The results suggest that when a retail store faces even a relatively small cost to determine optimal non-uniform prices, it may be optimal to charge the same price for many products