Asymmetric price adjustment in the small

Haipeng (Allan) Chen; Daniel Levy; Sourav Ray; Mark Bergen

doi:10.1016/j.jmoneco.2008.05.002

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Asymmetric price adjustment in the small

Journal article

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Asymmetric price adjustment in the small

Haipeng (Allan) Chen, Daniel Levy, Sourav Ray and Mark Bergen

Journal of monetary economics, Vol.55(4), pp.728-737

05/01/2008

DOI: 10.1016/j.jmoneco.2008.05.002

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Abstract

Analyses of a large retail scanner price data set reveal a new and surprising regularity small price increases occur more frequently than small price decreases for price changes of up to 10 0. That is, we find asymmetric price adjustment "in the small." Furthermore, it turns out that inflation offers only a partial explanation for the finding. Indeed, substantial proportion of the asymmetry remains unexplained, even after accounting for the inflation. For example, the asymmetry holds also after excluding periods of inflation from the data, and even for products whose price had not increased. The findings hold for different aggregate and disaggregate measures of inflation and also after allowing for lagged price adjustments. (c) 2008 Elsevier B.V. All rights reserved.

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Details

Title: Subtitle: Asymmetric price adjustment in the small
Creators: Haipeng (Allan) Chen - Texas A&M University
Daniel Levy - Bar-Ilan University
Sourav Ray - McMaster University
Mark Bergen - University of Minnesota
Resource Type: Journal article
Publication Details: Journal of monetary economics, Vol.55(4), pp.728-737
DOI: 10.1016/j.jmoneco.2008.05.002
ISSN: 0304-3932
eISSN: 1873-1295
Publisher: Elsevier
Number of pages: 10
Language: English
Date published: 05/01/2008
Academic Unit: Marketing
Record Identifier: 9984618639202771

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