Food Processor Price Behavior: Firm-Level Evidence of Sticky Prices

J Shonkwiler and T. G. Taylor

American Journal of Agricultural Economics, 1988, vol. 70, issue 2, 239-244

Abstract: Firms in imperfectly competitive markets face direct and indirect costs when changing product prices. The latter costs reflect uncertain changes in revenue and market share resulting from the actions of rival firms. Rosett's friction model is applied to firm-level data to provide estimates of the indirect costs of changing prices for a major processor of frozen concentrated orange juice. Results indicate that indirect costs cause significant price rigidity. Additionally the hypothesis that prices are equally rigid for upward and downward changes could not be rejected.

Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:70:y:1988:i:2:p:239-244.

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