Price Changes - Stickiness and Internal Coordination in Multiproduct Firms.
Working paper
Åpne
Permanent lenke
http://hdl.handle.net/11250/2427576Utgivelsesdato
2016-12Metadata
Vis full innførselSamlinger
- Discussion papers (SAM) [647]
Sammendrag
We assess empirically the micro-foundations of producers’ sticky pricing behaviour. We
account for various functional forms of menu costs. The focus is on the analysis of
multiproduct plants, and the menu costs therefore also allow for economies of scope. The
structural model developed is tested using monthly product- and plant-specific producer
prices for Norwegian plants. We find evidence of linear and fixed menu costs that account for
inaction of price adjustment. Convex menu costs are statistically significant but of moderate
importance. Finally, our estimates suggest economies of scope in adjusting prices resulting in
(incomplete) synchronization of price changes.