Rigid Prices: Evidence from U.S. Scanner Data

20 Pages Posted: 24 Apr 2014

See all articles by Jeffrey R. Campbell

Jeffrey R. Campbell

University of Notre Dame; Tilburg University

Benjamin Eden

Vanderbilt University

Multiple version iconThere are 2 versions of this paper

Date Written: May 2014

Abstract

This article uses weekly scanner data from two small U.S. cities to characterize time and state dependence of grocers' pricing decisions. In these data, the probability of a nominal adjustment declines with the time since the last price change. A store's price for a particular product typically goes through several price changes in rapid succession before settling down. We also detect state dependence: The probability of a nominal adjustment is highest when a store's price substantially differs from the average of other stores' prices. However, extreme relative prices typically reflect the store's recent changes instead of changes in average prices.

Suggested Citation

Campbell, Jeffrey R. and Eden, Benjamin, Rigid Prices: Evidence from U.S. Scanner Data (May 2014). International Economic Review, Vol. 55, Issue 2, pp. 423-442, 2014, Available at SSRN: https://ssrn.com/abstract=2428481 or http://dx.doi.org/10.1111/iere.12055

Jeffrey R. Campbell (Contact Author)

University of Notre Dame ( email )

United States

Tilburg University ( email )

Tilburg, 5000 LE
Netherlands

Benjamin Eden

Vanderbilt University ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States

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