Informational Rigidities and the Stickiness of Temporary Sales
How do retailers react to cost changes? While temporary sales account for 95% of price change in our data, retail prices respond to a wholesale cost increase entirely through the regular price. Sales actually respond temporarily in the opposite direction from regular prices, as though to conceal the...
| Main Authors: | , , , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
Elsevier BV
2020
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| Online Access: | https://hdl.handle.net/1721.1/126849 |
| _version_ | 1811071441662115840 |
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| author | Anderson, Eric Malin, Benjamin A. Nakamura, Emi Simester, Duncan Steinsson, Jon |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Anderson, Eric Malin, Benjamin A. Nakamura, Emi Simester, Duncan Steinsson, Jon |
| author_sort | Anderson, Eric |
| collection | MIT |
| description | How do retailers react to cost changes? While temporary sales account for 95% of price change in our data, retail prices respond to a wholesale cost increase entirely through the regular price. Sales actually respond temporarily in the opposite direction from regular prices, as though to conceal the price hike. Additional evidence from responses to commodity cost and local unemployment shocks, as well as broader evidence from BLS data, reinforces these findings. Institutional evidence indicates that sales are complex contingent contracts, determined substantially in advance. In a standard price-discrimination model, these institutional practices leave little money ``on the table”. |
| first_indexed | 2024-09-23T08:51:00Z |
| format | Article |
| id | mit-1721.1/126849 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T08:51:00Z |
| publishDate | 2020 |
| publisher | Elsevier BV |
| record_format | dspace |
| spelling | mit-1721.1/1268492022-09-30T11:43:07Z Informational Rigidities and the Stickiness of Temporary Sales Anderson, Eric Malin, Benjamin A. Nakamura, Emi Simester, Duncan Steinsson, Jon Massachusetts Institute of Technology. Department of Economics Sloan School of Management How do retailers react to cost changes? While temporary sales account for 95% of price change in our data, retail prices respond to a wholesale cost increase entirely through the regular price. Sales actually respond temporarily in the opposite direction from regular prices, as though to conceal the price hike. Additional evidence from responses to commodity cost and local unemployment shocks, as well as broader evidence from BLS data, reinforces these findings. Institutional evidence indicates that sales are complex contingent contracts, determined substantially in advance. In a standard price-discrimination model, these institutional practices leave little money ``on the table”. 2020-08-31T21:03:42Z 2020-08-31T21:03:42Z 2017-10 2017-06 2019-09-25T15:44:54Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/126849 Anderson, Eric et al. "Informational Rigidities and the Stickiness of Temporary Sales." Journal of Monetary Economics 90 (October 2017): 64-83 © 2017 Elsevier B.V. en http://dx.doi.org/10.1016/J.JMONECO.2017.06.003 Journal of Monetary Economics Creative Commons Attribution-NonCommercial-NoDerivs License http://creativecommons.org/licenses/by-nc-nd/4.0/ application/pdf Elsevier BV Other repository |
| spellingShingle | Anderson, Eric Malin, Benjamin A. Nakamura, Emi Simester, Duncan Steinsson, Jon Informational Rigidities and the Stickiness of Temporary Sales |
| title | Informational Rigidities and the Stickiness of Temporary Sales |
| title_full | Informational Rigidities and the Stickiness of Temporary Sales |
| title_fullStr | Informational Rigidities and the Stickiness of Temporary Sales |
| title_full_unstemmed | Informational Rigidities and the Stickiness of Temporary Sales |
| title_short | Informational Rigidities and the Stickiness of Temporary Sales |
| title_sort | informational rigidities and the stickiness of temporary sales |
| url | https://hdl.handle.net/1721.1/126849 |
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