Estimating Pricing Rigidities in Bilateral Transactions Markets

Many price indices are constructed using bilateral transaction prices. This paper shows how the time series behavior of cross-sectional moments can reveal useful information about pricing in transactions markets. Inference is formalized a microlevel determination model that allows for rigid at level individual buyer/seller as well asymmetries bargaining power. The used to estimate rigidities Norwegian salmon export transactions. Results suggest high rate revisions and an informative index. conducted fixed intervals consistent with optimal under costly more likely when prices below reference market.