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Asymmetric price adjustment: evidence from weekly product-level scanner price data

  • Georg Müller

    (Monitor Group, Chicago IL, USA)

  • Sourav Ray

    (McMaster University, Hamilton ON, Canada)

Registered author(s):

    We investigate asymmetric price responses by considering a unique, highly disaggregate retailer- and product-level time series at a major supermarket chain. We find asymmetry exists, but is limited in scope and there is no evidence of a pervasive chain wide asymmetric pricing strategy. To explain product level variation, we borrow from both economic and marketing perspectives to suggest menu costs, operational efficiency, competition, and consumer perceptions as important factors. The evidence suggests an efficiency-based rationale for asymmetry. This study complements that of Peltzman (2000. J. Polit. Econ. 108 (3): 466-502.) who found no systematic asymmetry in a study of the same data considered at a more aggregate level. Copyright © 2007 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/mde.1377
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    Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

    Volume (Year): 28 (2007)
    Issue (Month): 7 ()
    Pages: 723-736

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    Handle: RePEc:wly:mgtdec:v:28:y:2007:i:7:p:723-736
    DOI: 10.1002/mde.1377
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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