This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Asymmetric Price Adjustment in the Small Author info | Abstract | Publisher info | Download info | Related research | Statistics Levy, Daniel
Chen, Haipeng (Allan)
Ray, Sourav
Bergen, Mark
Additional information is available for the following
registered author(s):
Analyzing a large weekly retail transaction price dataset, we uncover a surprising regularity—small price increases occur more frequently than small price decreases for price changes of up to about 10 cents, while there is no such asymmetry for larger price changes. The asymmetry holds for the entire sample and for individual categories. We find that while inflation can explain some of the asymmetry, inflation is not the whole story as the asymmetry holds even after excluding inflationary periods from the data, and even for products whose price had not increased over the eight-year period. The findings hold for different measures of inflation and also after allowing for lagged price adjustments. We offer a consumer-based explanation for these findings.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
1097.
Download reference. The following formats are available: HTML ,
plain text ,
BibTeX ,
RIS (EndNote),
ReDIF
Length:
Date of creation: 30 Nov 2006Date of revision:
Handle: RePEc:pra:mprapa:1097Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany Phone: +49-(0)89-2180-2219 Fax: +49-(0)89-2180-3900 Web page: http://mpra.ub.uni-muenchen.de More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Ekkehart Schlicht).
Keywords: Asymmetric Price Adjustment Price Rigidity Rational Inattention Rational Ignorance Other versions of this item:
Article Chen, Haipeng (Allan) & Levy, Daniel & Ray, Sourav & Bergen, Mark, 2008.
"Asymmetric price adjustment in the small ,"
Journal of Monetary Economics ,
Elsevier, vol. 55(4), pages 728-737, May.
[Downloadable!] (restricted) Paper Find related papers by JEL classification: D21 - Microeconomics - - Production and Organizations - - - Firm Behavior D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Sam Peltzman, 2000.
"Prices Rise Faster than They Fall ,"
Journal of Political Economy ,
University of Chicago Press, vol. 108(3), pages 466-502, June.
[Downloadable!] (restricted)
Other versions: Daniel Levy & Mark Bergen & Shantanu Dutta & Robert Venable, 2005.
"The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains ,"
Macroeconomics
0505012, EconWPA.
[Downloadable!]
Other versions: Reis, Ricardo, 2006.
"Inattentive consumers ,"
Journal of Monetary Economics ,
Elsevier, vol. 53(8), pages 1761-1800, November.
[Downloadable!] (restricted)
Other versions:
Ricardo Reis, 2004.
"Inattentive Consumers ,"
Working Papers
135, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
[Downloadable!] Ricardo Reis, 2004.
"Inattentive Consumers ,"
NBER Working Papers
10883, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Reis, Ricardo, 2005.
"Inattentive Consumers ,"
CEPR Discussion Papers
5053, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Jeffrey D. Karrenbrock, 1991.
"The behavior of retail gasoline prices: symmetric or not? ,"
Review ,
Federal Reserve Bank of St. Louis, issue Jul, pages 19-29.
[Downloadable!]
Daniel Levy & Shantanu Dutta & Mark Bergen, 2004.
"Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data ,"
Macroeconomics
0402021, EconWPA.
[Downloadable!]
Other versions:
Levy, Daniel & Dutta, Shantanu & Bergen, Mark, 2002.
"Heterogeneity in Price Rigidity: Evidence from a Case Study Using Microlevel Data ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 34(1), pages 197-220, February.
Neumark, David & Sharpe, Steven A, 1992.
"Market Structure and the Nature of Price Rigidity: Evidence from the Market for Consumer Deposits ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 107(2), pages 657-80, May.
[Downloadable!] (restricted)
Other versions: Mark Zbaracki & Mark Ritson & Daniel Levy & Shantanu Dutta & Mark Bergen, 2004.
"Managerial and Customer Costs of Price Adjustment: Direct Evidence from Industrial Markets ,"
Macroeconomics
0402020, EconWPA.
[Downloadable!]
Other versions: Lach, Saul & Tsiddon, Daniel, 1992.
"The Behavior of Prices and Inflation: An Empirical Analysis of Disaggregated Price Data ,"
Journal of Political Economy ,
University of Chicago Press, vol. 100(2), pages 349-89, April.
[Downloadable!] (restricted)
Georg Müller & Sourav Ray, 2007.
"Asymmetric price adjustment: evidence from weekly product-level scanner price data ,"
Managerial and Decision Economics ,
John Wiley & Sons, Ltd., vol. 28(7), pages 723-736.
[Downloadable!]
Daniel Levy & Andrew Young, 2004.
""The Real Thing:" Nominal Price Rigidity of the Nickel Coke, 1886-1959 ,"
Macroeconomics
0402013, EconWPA.
[Downloadable!]
Other versions:
Daniel Levy & Andrew Young, 2004.
""The Real Thing:" Nominal Price Rigidity of the Nickel Coke, 1886–1959 ,"
Emory Economics
0405, Department of Economics, Emory University (Atlanta).
[Downloadable!] Levy, Daniel & Young, Andrew, 2004.
"The Real Thing: Nominal Price Rigidity of the Nickel Coke, 1886–1959 ,"
MPRA Paper
1046, University Library of Munich, Germany.
[Downloadable!] Shugan, Steven M, 1980.
" The Cost of Thinking ,"
Journal of Consumer Research: An Interdisciplinary Quarterly ,
University of Chicago Press, vol. 7(2), pages 99-111, Se.
Julio J. Rotemberg, 2002.
"Customer Anger at Price Increases, Time Variation in the Frequency of Price Changes and Monetary Policy ,"
NBER Working Papers
9320, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Hannan, Timothy H & Berger, Allen N, 1991.
"The Rigidity of Prices: Evidence from the Banking Industry ,"
American Economic Review ,
American Economic Association, vol. 81(4), pages 938-45, September.
[Downloadable!] (restricted)
Kalyanaram, Gurumurthy & Little, John D C, 1994.
"An Empirical Analysis of Latitude of Price Acceptance in Consumer Package Goods ,"
Journal of Consumer Research: An Interdisciplinary Quarterly ,
University of Chicago Press, vol. 21(3), pages 408-18, December.
Tsiddon, Daniel, 1993.
"The (Mis)Behaviour of the Aggregate Price Level ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 60(4), pages 889-902, October.
[Downloadable!] (restricted)
Lach, Saul & Tsiddon, Daniel, 1996.
"Staggering and Synchronization in Price-Setting: Evidence from Multiproduct Firms ,"
American Economic Review ,
American Economic Association, vol. 86(5), pages 1175-96, December.
[Downloadable!] (restricted)
Other versions: Tobin, James, 1982.
"Money and Finance in the Macroeconomic Process ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 14(2), pages 171-204, May.
[Downloadable!] (restricted)
Other versions: Edward S. Knotek II, 2006.
"A tale of two rigidities: sticky prices in a sticky-information environment ,"
Research Working Paper
RWP 06-15, Federal Reserve Bank of Kansas City.
[Downloadable!]
Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986.
"Fairness as a Constraint on Profit Seeking: Entitlements in the Market ,"
American Economic Review ,
American Economic Association, vol. 76(4), pages 728-41, September.
[Downloadable!] (restricted)
Ricardo Reis, 2006.
"Inattentive Producers ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 73(3), pages 793-821, 07.
[Downloadable!] (restricted)
Other versions:
Ricardo Reis, 2005.
"Inattentive Producers ,"
2005 Meeting Papers
290, Society for Economic Dynamics.
[Downloadable!] Ricardo Reis, 2005.
"Inattentive Producers ,"
NBER Working Papers
11820, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Reis, Ricardo, 2005.
"Inattentive Producers ,"
CEPR Discussion Papers
5393, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Mark J. Zbaracki & Mark Bergen & Daniel Levy, 2006.
"The Anatomy of a Price Cut: Discovering Organizational Sources of the Costs of Price Adjustment ,"
Emory Economics
0610, Department of Economics, Emory University (Atlanta).
[Downloadable!]
Peter J. Klenow & Jonathan L. Willis, 2006.
"Sticky information and sticky prices ,"
Research Working Paper
RWP 06-13, Federal Reserve Bank of Kansas City.
[Downloadable!]
Other versions: Samuelson, William & Zeckhauser, Richard, 1988.
" Status Quo Bias in Decision Making ,"
Journal of Risk and Uncertainty ,
Springer, vol. 1(1), pages 7-59, March.
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Levy, Daniel & Lee, Dongwon & Chen, Allan (Haipeng) & Kauffman, Robert & Bergen, Mark, 2007.
"Price Points and Price Rigidity ,"
MPRA Paper
1472, University Library of Munich, Germany.
[Downloadable!]
Other versions: Daniel Levy, 2007.
"Price rigidity and flexibility: new empirical evidence ,"
Managerial and Decision Economics ,
John Wiley & Sons, Ltd., vol. 28(7), pages 639-647.
[Downloadable!]
Other versions:
Access and
download statistics Did you know? About 750 journals are listed on RePEc .
This page was last updated on 2008-10-10.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .