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Heterogeneous Price Dynamics, Synchronization, and Retail Chains: Evidence from Scanner Data

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  • Andres Elberg

    (Facultad de Economía y Empresa, Universidad Diego Portales)

Abstract

This paper uses a novel scanner data set to study price setting decisions of major retailers in an emerging market economy. I find evidence of heterogeneous pricing dynamics across retail chains. Heterogeneity is especially pronounced in the case of posted (as opposed to reference) prices. Furthermore, retail chains appear to set prices in a centralized fashion: most barcode-store level prices coincide with the intra-chain modal price. The relationship between reference and chain-wide prices reveals that deviations from reference prices cannot be solely attributed to shocks to local market conditions. In line with results on retail chain pricing, I find strong evidence of synchronization of price changes across stores within chains but weaker evidence of synchronization across retail chains. The evidence is also consistent with synchronization of price changes within retail stores.

Suggested Citation

  • Andres Elberg, 2014. "Heterogeneous Price Dynamics, Synchronization, and Retail Chains: Evidence from Scanner Data," Working Papers 52, Facultad de Economía y Empresa, Universidad Diego Portales.
    • Handle: RePEc:ptl:wpaper:52
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    Cited by:

    1. Elberg, Andrés, 2016. "Sticky prices and deviations from the Law of One Price: Evidence from Mexican micro-price data," Journal of International Economics, Elsevier, vol. 98(C), pages 191-203.
    2. Andres Elberg, 2014. "Temporal Aggregation and Convergence to the Law of One Price: Evidence from Micro Data," Working Papers 53, Facultad de Economía y Empresa, Universidad Diego Portales.
    3. Carlos Noton & Andrés Elberg, 2013. "Revealing Bargaining Power through Actual Wholesale Prices," Documentos de Trabajo 304, Centro de Economía Aplicada, Universidad de Chile.

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