Advanced Search
MyIDEAS: Login

A Theory of Price Rigidities when Quality is Unobservable

Contents:

Author Info

  • Allen, Franklin

Abstract

A theory of price and quantity adjustments, in response to stochastic changes in demand, is developed for competitive mark ets. The level of demand is observable, but product quality is not. I t is shown that the higher the serial correlation of demand, the more rigid are prices and the greater the change in outputs. If the corre lation is low, prices are less rigid than when quality is observable; if it is high, they can be more rigid. Even with downward demand and upward sloping supply curves, prices can be completely rigid. Copyright 1988 by The Review of Economic Studies Limited.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://links.jstor.org/sici?sici=0034-6527%28198801%2955%3A1%3C139%3AATOPRW%3E2.0.CO%3B2-0&origin=bc
File Function: full text
Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Economic Studies.

Volume (Year): 55 (1988)
Issue (Month): 1 (January)
Pages: 139-51

as in new window
Handle: RePEc:bla:restud:v:55:y:1988:i:1:p:139-51

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0034-6527

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Lünnemann, Patrick & Wintr, Ladislav, 2006. "Are internet prices sticky?," Working Paper Series 0645, European Central Bank.
  2. Gerd Weinrich, 1997. "Endogenous fixprices and sticky price adjustment of risk-averse firms," Journal of Economics, Springer, vol. 66(3), pages 283-305, October.
  3. Michael J. Hicks, 2007. "Hierarchical delays as a source of nominal price rigidities: evidence from the microcomputer industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 803-815.
  4. Dexter, Albert S. & Levi, Maurice D. & Nault, Barrie R., 2002. "Sticky prices: the impact of regulation," Journal of Monetary Economics, Elsevier, vol. 49(4), pages 797-821, May.
  5. Gu, Gyun Cheol, 2012. "Denial, Rationalization, and the Administered Price Thesis," MPRA Paper 42594, University Library of Munich, Germany.
  6. Lourdes Martín & Diego Rodríguez, 2004. "Pricing to market at firm level," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 140(2), pages 302-320, June.
  7. Weinrich, Gerd, 1997. "Endogenous Fixprices and Sticky Price Adjustment of Risk-averse Firms," MPRA Paper 6302, University Library of Munich, Germany.
  8. Silvia Fabiani & Angela Gattulli & Roberto Sabbatini, 2003. "La rigidità dei prezzi in Italia," Moneta e Credito, Economia civile, vol. 56(223), pages 325-358.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:restud:v:55:y:1988:i:1:p:139-51. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.