Quantum Prices

Diego Aparicio and Roberto Rigobon

No 26646, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Online data was collected for 350,000 products from over 65 fashion retailers in the U.S. and the U.K. Many retailers practice an extreme form of stickiness described as quantum prices: a large number of differentiated products are priced using few sparse prices, with price changes occurring rarely and in large magnitudes. Quantum prices exist within categories (similar products) and across product introductions (over time). Most surprisingly, it also occurs across categories (very different products). Normalized measures indicate substantial price clustering beyond the role of popular prices, assortment size, or digit endings. Quantum prices imply frictions in lumpy price adjustments through product mix, inflation measurement, and in the law-of-one-price.

JEL-codes: D2 D22 D83 E31 L81 M3 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-com, nep-mac and nep-mon
Note: IFM ME
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Published as Diego Aparicio & Roberto Rigobon, 2023. "Quantum prices," Journal of International Economics, .

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