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Staggering and synchronisation of prices in a low-inflation environment: Evidence from German food stores

Author

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  • Jens-Peter Loy

    (Department of Agricultural Economics, Georg-August-University, Göttingen 37073, Germany. E-mail: jploy@web.de)

  • Christoph Weiss

    (Institute for Food Economics, Christian-Albrechts-University, Kiel 24118, Germany. E-mail: cweiss@food-econ.uni-kiel.de)

Abstract

Only a few studies have analysed staggering and synchronisation in pricing behaviour of multiproduct firms. These studies used low-frequency data in an environment of high rates of inflation. This article investigates staggering and synchronisation of weekly prices for 10 food products in 131 grocery stores in Germany over the period of May 1995 to December 2000 (296 weeks). Different forms of staggering and synchronisation (across-store synchronisation, within type-of-store synchronisation, within-retailer synchronisation, or across-product synchronisation) have been analysed. None of these forms of synchronisation is supported empirically, however. In contrast, perfect staggering can only be rejected in very few cases, indicating that fixed or firm-specific menu costs are not major causes for price stickiness. [JEL classification: L11, D40] © 2002 Wiley Periodicals, Inc.

Suggested Citation

  • Jens-Peter Loy & Christoph Weiss, 2002. "Staggering and synchronisation of prices in a low-inflation environment: Evidence from German food stores," Agribusiness, John Wiley & Sons, Ltd., vol. 18(4), pages 437-457.
    • Handle: RePEc:wly:agribz:v:18:y:2002:i:4:p:437-457
    DOI: 10.1002/agr.10032
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    Cited by:

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    2. Fauzia SOHAIL* & Ambreen FATIMA**, 2018. "PRICE SETTING BEHAVIOUR IN PAKISTAN: Stylized Facts from Micro SPI Dataset," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 28(2), pages 253-286.
    3. Lan, Hao & Lloyd, Tim A. & Morgan, C. Wyn, 2013. "The hazard function of sales: An analysis of UK supermarket food prices," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 151972, Agricultural Economics Society.
    4. Kopp, Thomas, 2017. "Bertrand Competition in Oligopsonistic Market Structures - the Case of the Indonesian Rubber Processing Sector," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 261980, German Association of Agricultural Economists (GEWISOLA).
    5. Hoffmann, A. & Loy, J.-P., 2010. "Sonderangebote und Preissynchronisation im deutschen Lebensmitteleinzelhandel," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 45, March.
    6. Sebnem Bahadir-Lust & Jens-Peter Loy & Christoph R. Weiss, 2007. "Are they always offering the lowest price? An empirical analysis of the persistence of price dispersion in a low inflation environment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 777-788.
    7. Hellberg-Bahr, Anneke & Pfeuffer, Martin & Spiller, Achim & Brümmer, Bernhard, 2011. "Using Price Rigidities to Explain Pricing Strategies in the Organic Milk Chain," 2011 International European Forum, February 14-18, 2011, Innsbruck-Igls, Austria 122003, International European Forum on System Dynamics and Innovation in Food Networks.
    8. Robert J. Kauffman & Charles A. Wood, 2007. "Follow the leader: price change timing in Internet-based selling," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 679-700.
    9. Hillen, Judith & Fedoseeva, Svetlana, 2021. "E-commerce and the end of price rigidity?," Journal of Business Research, Elsevier, vol. 125(C), pages 63-73.

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    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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