Sticky Information and Price Controls: Evidence from a Natural Experiment

Doron Sayag (), Avichai Snir () and Daniel Levy ()
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Doron Sayag: Department of Economics, Bar-Ilan University, Israel
Avichai Snir: Department of Economics, Bar-Ilan University, Israel

Working Paper series from Rimini Centre for Economic Analysis

Abstract: We test the predictions of the sticky information model using a survey dataset by comparing the shoppers' accuracy in recalling the prices of regulated and comparable unregulated products. Regulated product prices change less frequently, vary less across stores and between brands, and are sold more than comparable but unregulated product prices. Therefore, shoppers would be expected to recall the regulated product prices more accurately. However, we find that shoppers are better at recalling the prices of unregulated products, in line with the sticky information model which predicts that shoppers will be more attentive to prices that change more frequently.

Keywords: sticky information; cost and benefit of information; information gathering; information processing; price cap; price regulation; price controls; price adjustment; sticky prices; rigid prices (search for similar items in EconPapers)
JEL-codes: D12 D83 D91 E31 K20 L11 L16 L50 (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-reg
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http://rcea.org/RePEc/pdf/wp25-02.pdf

Related works:
Journal Article: Sticky information and price controls: Evidence from a natural experiment (2025)
Journal Article: Sticky information and price controls: Evidence from a natural experiment (2025)
Working Paper: Sticky information and price controls: Evidence from a natural experiment (2025)
Working Paper: Sticky information and price controls: Evidence from a natural experiment (2025)
Working Paper: Sticky Information and Price Controls: Evidence from a Natural Experiment (2025)
Working Paper: Sticky information and price controls: Evidence from a natural experiment (2025)
Working Paper: Sticky Information and Price Controls: Evidence from a Natural Experiment (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:25-02

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