Informational rigidities and the stickiness of temporary SalesEric Anderson, Benjamin Malin, Emi Nakamura, Duncan Simester and Jon Steinsson Journal of Monetary Economics, 2017, vol. 90, issue C, 64-83 Abstract: 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”. Keywords: Temporary sales; Inflation dynamics; Trade deals (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:90:y:2017:i:c:p:64-83 DOI: 10.1016/j.jmoneco.2017.06.003 Access Statistics for this article Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser More articles in Journal of Monetary Economics from Elsevier |
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