Asymmetric Price Adjustment in the Small

Haipeng (Allan) Chen (), Daniel Levy (), Sourav Ray and Mark Bergen

EconStor Open Access Articles and Book Chapters, 2008, vol. 55, issue 4, 728-737

Abstract: Analyses of a large retail scanner price data set reveal a new and surprising regularity – small price increases occur more frequently than small price decreases for price changes of up to 10¢. That is, we find asymmetric price adjustment “in the small.” Furthermore, it turns out that inflation offers only a partial explanation for the finding. Indeed, substantial proportion of the asymmetry remains unexplained, even after accounting for the inflation. For example, the asymmetry holds also after excluding periods of inflation from the data, and even for products whose price had not increased. The findings hold for different aggregate and disaggregate measures of inflation and also after allowing for lagged price adjustments.

Keywords: Asymmetric Price Adjustment; Price Rigidity; Inflation; Rational Inattention; Monetary Policy (search for similar items in EconPapers)
JEL-codes: D11 D21 D80 E31 L11 L16 M31 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (86)

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Related works:
Journal Article: Asymmetric price adjustment in the small (2008)
Working Paper: Asymmetric price adjustment in the small (2008)
Working Paper: Asymmetric Price Adjustment in the Small (2007)
Working Paper: Asymmetric Price Adjustment in the Small (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:206846

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