New Product Introductions and Price Markups
AbstractThe present study contributes to the literature of countercyclical price markups (real price rigidities). Specifically, it discusses the relation between new product introductions and industry and aggregate demand fluctuations, as well as their impact on firms' pricing policies, and in particular on price markups. Devinney  shows that the introduction of new products happens mostly at the beginning of the business cycle, while Axarloglou  explores the seasonal and non-seasonal properties of new product introductions in U.S. manufacturing. The present study extends this literature by showing that price markups decline in response to new product introductions, and since new product introductions vary in a procyclical manner, price markups can be countercyclical.
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Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 30 (2004)
Issue (Month): 2 (Spring)
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Find related papers by JEL classification:
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
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- Kostas Axarloglou, 2007. "Thick markets, market competition and pricing dynamics: evidence from retailers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 669-677.
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