95,489 research outputs found
Endogenous Fixprices and Sticky Price Adjustment of Risk-averse Firms
No full textA risk-averse price-setting firm which knows the quantity demanded at the status quo price but has imperfect information otherwise may choose not to change it although an otherwise identical risk-neutral firm would do so, provided the variance of the firm's subjective probability distribution over quantities demanded as a function of price displays a kink at the status quo. This is equivalent to risk aversion of order one. When no such endogenous fixprice exists, the size of price adjustment still tends to zero as risk aversion tends to infinity, and to any arbitrarily small menu cost there exists a degree of risk aversion so that the firm will not adjust.fixed prices, price adjustment, risk aversion, menu cost
Price setting in the euro area: Some stylized facts from Individual Consumer Price Data
No full textThis paper documents patterns of price setting at the retail level in the euro area. A set of stylized facts on the frequency and size of price changes is presented along with an econometric investigation of their main determinants. Price adjustment in the euro area can be summarized in six stylized facts. First, prices of most products change rarely. The average monthly frequency of price adjustment is 15 p.c., compared to about 25 p.c. in the US. Second, the frequency of price changes is characterized by substantial crossproduct heterogeneity and pronounced sectoral patterns: prices of (oilrelated) energy and unprocessed food products change very often, while price adjustments are less frequent for processed food products, nonenergy industrial goods and services. Third, crosscountry heterogeneity exists but is less pronounced. Fourth, price decreases are not uncommon. Fifth, price increases and decreases are sizeable compared to aggregate and sectoral inflation rates. Sixth, price changes are not highly synchronized across pricesetters. Moreover, the frequency of price changes in the euro area is related to a number of factors, in particular seasonality, outlet type, indirect taxation, use of attractive prices as well as aggregate or productspecific inflation.
Price Setting in the Euro Area: Some Stylized Facts from Individual Consumer Price Data.
No full textThis paper documents patterns of price setting at the retail level in the euro area. A set of stylized facts on the frequency and size of price changes is presented along with an econometric investigation of their main determinants. Price adjustment in the euro area can be summarized in six stylized facts. First, prices of most products change rarely. The average monthly frequency of price adjustment is 15 p.c., compared to about 25 p.c. in the US. Second, the frequency of price changes is characterized by substantial cross-product heterogeneity and pronounced sectoral patterns: prices of (oil-related) energy and unprocessed food products change very often, while price adjustments are less frequent for processed food products, non-energy industrial goods and services. Third, cross-country heterogeneity exists but is less pronounced. Fourth, price decreases are not uncommon. Fifth, price increases and decreases are sizeable compared to aggregate and sectoral inflation rates. Sixth, price changes are not highly synchronized across price-setters. Moreover, the frequency of price changes in the euro area is related to a number of factors, in particular seasonality, outlet type, indirect taxation, use of attractive prices as well as aggregate or product-specific inflation.Price-setting ; consumer price ; frequency of price change.
Price setting in the euro area: some stylized facts from individual consumer price data
No full textThis paper documents patterns of price setting at the retail level in the euro area, summarized in six stylized facts. First, the average euro area monthly frequency of price adjustment is 15 p.c., compared to about 25 p.c. in the US. Second, the frequency of price changes is characterized by substantial cross product heterogeneity - prices of oil and unprocessed food products change very often, while price adjustments are less frequent for processed food, non energy industrial goods and services. Third, cross country heterogeneity exists but is less pronounced. Fourth, price decreases are not uncommon. Fifth, price increases and decreases are sizeable compared to aggregate and sectoral inflation rates. Sixth, price changes are not highly synchronized across retailers. Moreover, the frequency of price changes in the euro area is related to several factors, such as seasonality, outlet type, indirect taxation, pricing practices as well as aggregate or product specific inflation. JEL Classification: E31, D40, C25consumer price, frequency of price change, Pricesetting
Price setting in the euro area: Some stylized facts from Individual Consumer Price Data
No full textThis paper documents patterns of price setting at the retail level in the euro area, summarized in six stylized facts. First, the average euro area monthly frequency of price adjustment is 15 p.c., compared to about 25 p.c. in the US. Second, the frequency of price changes is characterized by substantial cross product heterogeneity - prices of oil and unprocessed food products change very often, while price adjustments are less frequent for processed food, non energy industrial goods and services. Third, cross country heterogeneity exists but is less pronounced. Fourth, price decreases are not uncommon. Fifth, price increases and decreases are sizeable compared to aggregate and sectoral inflation rates. Sixth, price changes are not highly synchronized across retailers. Moreover, the frequency of price changes in the euro area is related to several factors, such as seasonality, outlet type, indirect taxation, pricing practices as well as aggregate or product specific inflation.Price-setting, consumer price, frequency of price change.
Effet signal d'une réduction promotionnelle du prix : concept et expérimentation.
No full textL'effet observé à court terme d'une réduction promotionnelle du prix sur la demande est souvent positif du fait de la valorisation des bénéfices offerts par la promotion et par le simple effet signal engendré par la communication promotionnelle. Lorsque le consommateur effectue une évaluation approfondie de l'offre promotionnelle et qu'il manque d'informations (sur le montant de la réduction ou le prix de base), l'information transmise par la promotion, qui est à la source de l'effet signal, est aussi utilisée pour élaborer le cadre du choix. Un conflit entre la cherté perçue et le signal promotionnel peut donc dévaloriser une offre. Dans ces conditions, nous montrons, par l'analyse des résultats d'une expérimentation sur 320 consommateurs, que le changement du cadre du choix résultant d'une offre promotionnelle conduit à un rejet d'achat plus important d'une marque premium pour un produit de grande consommation. Si ce résultat d'un effet négatif d'une réduction promotionnelle du prix sur la demande à court terme est rarement observé sur les ventes, il doit cependant conduire les managers à anticiper une baisse de l'efficacité promotionnelle lorsque la réduction de prix n'est pas indiquée et à en limiter l'usage pour les marques premium.Signaling effect of a promotional price reduction: concept and experimentation Abstract Sales promotion has often positive effects on short term demand effects due to the benefits provided and to the signaling effect of the communication. If information is missing (regular price, price reduction) when consumers have an extended choice process, the information transmitted by the sales promotion communication is used not only as a signal but also to elaborate the choice frame. Thus conflicting information between the promotional signal and perceived expensiveness can reduce perceived value. Under these conditions the author show, through analysis of experimental data on 320 consumers, that changes due to a promotional price reduction can result in higher rejection for a premium brand in a consumer good market. While decreases in sales volume due to promotional price reductions are not frequently observed, such a possibility means that managers have to anticipate a reduction of their promotional effectiveness when price reduction is not indicated (special offer) and to avoid its use for premium brands. Key words: Sales promotion, price reduction, promotion signal, experiment, Gabor & Granger.Gabor et Granger; Promotion des ventes; Réduction de prix; Effet signal; Expérimentation;
Consumer price behaviour in Luxembourg: evidence from micro CPI data
No full textThis paper uses micro-level price data and analyses the behaviour of consumer prices in Luxembourg. We find that the median duration of consumer prices is roughly 8 months. The median durations of energy and unprocessed food are about 1.5 and 5 months, while prices of services typically change fewer than once a year. For some product types, such as non-energy industrial goods and processed food, a relatively large share of the observed price changes is reverted afterwards. With the exception of services, individual prices do not show signs of downward rigidity. On average, price decreases are as large as price increases. Price changes are determined both by state- and time-dependent factors. Accumulated price and wage inflation, wage adjustment due to indexation, the cash changeover and a larger number of competitors increase the probability of a price change, while pricing at attractive pricing points and price regulation have the opposite effectPrice setting, consumer prices, rigidity, wage indexation, sales
Price setting in the euro area: Some stylized facts from Individual Consumer Price Data. NBB Working Paper Nr.74, September 2005
No full textThis paper documents patterns of price setting at the retail level in the euro area, summarized in six stylized facts. First, the average euro area monthly frequency of price adjustment is 15 p.c., compared to about 25 p.c. in the US. Second, the frequency of price changes is characterized by substantial cross product heterogeneity - prices of oil and unprocessed food products change very often, while price adjustments are less frequent for processed food, non energy industrial goods and services. Third, cross country heterogeneity exists but is less pronounced. Fourth, price decreases are not uncommon. Fifth, price increases and decreases are sizeable compared to aggregate and sectoral inflation rates. Sixth, price changes are not highly synchronized across retailers. Moreover, the frequency of price changes in the euro area is related to several factors, such as seasonality, outlet type, indirect taxation, pricing practices as well as aggregate or product specific inflation
Norm, Virtue and Information: Individual Behaviour and the Just Price in Thomas Aquinas' Summa theologica
No full textThis paper aims at putting forward the analytical stake of the few passages that Thomas Aquinas devotes to prices and exchange, mainly in the Summa Theologiae. At first sight, his objective is to enlighten a confessor vis-à-vis his penitent, or the judge in an ecclesiastical tribunal, by way of a group of normative prescriptions, tending to distinguish that which is just in commercial transactions from what is not. But on second thoughts, this objective leads the author to a more complex construction, which involves establishing a referential norm - the just price - to which the transaction price should be compared. It is recalled here that resorting to the just price - the discussion of which chiefly takes place in the commentaries on the Ethics avoids any consideration of individual behaviour. However, this last comes to the forefront when the issue dealt with is to explain the reasons why such a transaction price is equal to, or on the contrary departs from the just price. Thomas Aquinas' treatment of this issue allows one to acknowledge a) that individual behaviour is characterized by virtue or by vice in various informational contexts, and b) that the making of a transaction price is the result of a negotiation process between buyer and seller. In a context of correct information, where the partners are both virtuous, Thomas Aquinas explains why the transaction price is equal to the just price - in the exchange in se - or could differ from it - in the exchange per accidens. But focussing on the exchange in se, both an asymetry of information and the vice of at least one of the partners give rise to deception strategies leading to transaction prices, presented as just by the party who knows it is not, and agreed upon as just by the deceived party. Lastly, the possibility of retaining information during the negotiation process paves the way for the opportunity for the virtuous seller to protect himself against the higher power of negotiation of a possible vicious partner. Although aiming at a different goal, Thomas Aquinas thus provides a complete theory, not only of the just price, but more generally of exchange, in which ethical considerations become decisive in determining transaction prices.Just price; juste prix; medieval economics; pensée économique médiévale; Thomas Aquinas; Thomas d'Aquin; ethics; éthique
Agricultural Price Transmission Across Space and Commodities During Price Bubbles
No full textThis paper analyses the horizontal transmission of cereal price shocks both across different market places and across different commodities. The analysis is carried out using Italian and international weekly spot (cash) price data and concentrating the attention on years 2006-2010, a period of generalized exceptional exuberance and consequent rapid drop of agricultural prices. The work aims at investigating how price transmission may be affected during price bubbles. The properties of price time series are firstly explored to assess which data generation process may have eventually produced the observed patterns. Secondly, the interdependence across prices is specified and estimated adopting appropriate cointegration techniques.Price Transmission, Price Bubbles, Time Series Properties, Cointegration, Demand and Price Analysis, Q110, C320,
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