Variable Price Adjustment Costs
AbstractThe fixed (menu) cost approach has been criticized since administrative costs of price changes are small. This paper studies costs that depend on the size or the frequency of adjustment. The optimal pricing policy is similar to that in the menu cost model which is, therefore, a simple benchmark case. While recent empirical evidence implies rejection of the fixed cost model, it is consistent with the general specification used here. The analysis strongly suggests that nominal inflexibilities at the individual level are not due to administrative costs but result from unfavorable market response to price changes. Copyright 1993 by Oxford University Press.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 31 (1993)
Issue (Month): 3 (July)
Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Web page: http://ei.oupjournals.org/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Avichai Snir & Daniel Levy, 2011.
"Shrinking Goods and Sticky Prices: Theory and Evidence,"
2011-03, Department of Economics, Bar-Ilan University.
- Snir, Avichai & Levy, Daniel, 2011. "Shrinking Goods and Sticky Prices: Theory and Evidence," MPRA Paper 29565, University Library of Munich, Germany.
- Avichai Snir & Daniel Levy, 2011. "Shrinking Goods and Sticky Prices: Theory and Evidence," Working Paper Series 17_11, The Rimini Centre for Economic Analysis.
- Avichai Snir & Daniel Levy, 2011. "Shrinking Goods and Sticky Prices: Theory and Evidence," Emory Economics 1104, Department of Economics, Emory University (Atlanta).
- Avichai Snir & Daniel Levy & Alex Gotler & Haipeng (Allen) Chen, 2012.
"Not All Price Endings are Created Equal: Price Points and Asymmetric Price Rigidity,"
1206, Department of Economics, Emory University (Atlanta).
- Avichai Snir & Daniel Levy & Alex Gotler & Haipeng (Allan) Chen, 2012. "Not All Price Endings Are Created Equal: Price Points and Asymmetric Price Rigidity," Working Paper Series 69_12, The Rimini Centre for Economic Analysis.
- Snir, Avichai & Levy, Daniel & Gotler, Alex & Chen, Haipeng (Allan), 2012. "Not All Price Endings Are Created Equal: Price Points and Asymmetric Price Rigidity," MPRA Paper 42252, University Library of Munich, Germany.
- Davis, Michael C & Hamilton, James D, 2004.
"Why Are Prices Sticky? The Dynamics of Wholesale Gasoline Prices,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 36(1), pages 17-37, February.
- Michael C. Davis & James D. Hamilton, 2003. "Why Are Prices Sticky? The Dynamics of Wholesale Gasoline Prices," NBER Working Papers 9741, National Bureau of Economic Research, Inc.
- Emmanuel Dhyne & Jerzy Konieczny & Fabio Rumler & Patrick Sevestre, 2009. "Price rigidity in the euro area - An assessment," European Economy - Economic Papers 380, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Watanabe, Makoto, 2008.
"Inflation, price competition, and consumer search technology,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 32(12), pages 3780-3806, December.
- Makoto Watanabe, 2006. "Inflation, Price Competition and Consumer Search Technology," Economics Working Papers we065623, Universidad Carlos III, Departamento de Economía.
- Attila Rátfai, 2007. "The frequency and size of price adjustment: microeconomic evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 751-762.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) 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.