Retail Price Stickiness, Market Structure and Distribution Channels

Takayasu Matsuoka

No 4, Research Center for Price Dynamics Working Paper Series from Research Center for Price Dynamics, Institute of Economic Research, Hitotsubashi University

Abstract: Using Japanese scanner data of transaction prices and sales for more than 1,600 commodity groups from 1988 to 2008, we find a statistically significant negative correlation between the frequency of price changes and the degree of market concentration. We also find that structural factors of a distribution channel are significantly correlated with rigidity in retail prices. Decomposing the frequency of price changes into the frequency of intraday, sale, and regular price changes, we find that both inter- and intra-brand competition positively affect the frequency of sales. Inter-brand competition among manufacturers has a significant and positive effect on the frequency of regular price changes, whereas intra-brand competition among retailers has no such significant effect. We also document that the term of contracts between manufacturers and retailers has a significant and positive effect on price stickiness.

Keywords: Market structure; Distribution channels; Sticky prices (search for similar items in EconPapers)
JEL-codes: C41 E31 L11 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2012-03
New Economics Papers: this item is included in nep-com, nep-hme, nep-ind, nep-mkt and nep-mst
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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