Nominal Rigidities in a Mail Order Company: Estimation of the Probability of Price Adjustment

Bertarelli, Silvia (1999) Nominal Rigidities in a Mail Order Company: Estimation of the Probability of Price Adjustment. Bologna: Dipartimento di Scienze economiche DSE, p. 27. DOI 10.6092/unibo/amsacta/4960. In: Quaderni - Working Paper DSE (349). ISSN 2282-6483.
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Abstract

Abstract: Nominal price rigidities are analyzed from two different perspectives. From a qualitative point of view - as Kashyap (1995) - we look for coherent signs which confirm the presence of fixed costs of adjustment, and therefore the validity of state-dependent pricing rules. Our data concern a mail order Italian company and confirm that individual prices do not mimic the aggregate price index, as it was already claimed by Kashyap (1995) and Tsiddon (1993) for US and Israeli data. Second, we estimate by ordered probit models the probability to have nominal price adjustments (increase, rigidity or decrease) as a function of last period real price and rivals’ price level. Price point strategies are also investigated. We observe a common performance for all brands’ prices which supports a (S, s) rule hypothesis.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Bertarelli, Silvia
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ISSN
2282-6483
DOI
Deposit date
05 Apr 2016 09:35
Last modified
05 Apr 2016 09:35
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