Price-Setting Behavior with Menu Costs Experimental Evidence
نویسندگان
چکیده
منابع مشابه
Optimal price setting with observation and menu costs∗
We model the optimal price setting problem of a firm in the presence of both information and menu costs. In this problem the firm optimally decides when to collect costly information on the adequacy of its price, an activity which we refer to as a price “review”. Upon each review, the firm chooses whether to adjust its price, subject to a menu cost, and when to conduct the next price review. Th...
متن کاملMenu costs , firm size and price rigidity
If menu costs have a non-negligible lump-sum component and with larger firms having greater benefits from price adjustments, then larger firms will change price more frequently than smaller firms. Data from New Zealand firms support this hypothesis. Price duration decreases as firm size increases. Ordered probit analysis indicates the effect comes primarily from larger firms being more likely t...
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We study optimal price setting by a monopolist in an in nite horizon model with stochastic costs, moderate ination, and costly price adjustment. For realistic parameters, chosen to replicate observed frequencies of price changes, the model ts numerically several empirical regularities. In particular, price reductions are larger but less frequent than price increases, and prices respond consid...
متن کاملAsymmetries in Price-Setting Behavior: New Microeconometric Evidence from Switzerland∗
In this paper, we follow the recent empirical literature that has specified reduced-form models for price setting that are closely tied to (S, s)-pricing rules. Our contribution to the literature is twofold. First, we propose an estimator that relaxes distributional assumptions on the unobserved heterogeneity. Second, we use the estimator to examine the prevalence of positive price changes in a...
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We present an experimental study of the price-setting newsvendor problem, which extends the traditional framework by allowing the decision maker to determine both the selling price and the order quantity of a given item. We compare behavior under this model with two benchmark conditions where subjects have a single decision to make (price or quantity). We observe that subjects deviate from the ...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2013
ISSN: 1556-5068
DOI: 10.2139/ssrn.2325290