Non-price rigidity and cost of adjustment

Georg Müller, Mark Bergen, Shantanu Dutta and Daniel Levy ()
Additional contact information
Georg Müller: Deloitte Consulting [Diegem]
Mark Bergen: Carlson School of Management - UMN - University of Minnesota [Twin Cities] - UMN - University of Minnesota System
Shantanu Dutta: FBE, Marshall School of Business - USC - University of Southern California

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Abstract: There has been increasing interest in understanding how firms undertake non-price adjustment activities, especially in situations where prices may be rigid despite changes in market conditions. Using scanner price data for over 4,500 different food products from a large US supermarket chain, we document periods of rigidity in product additions and deletions: new products are less likely to be introduced, and existing products are less likely to be discontinued during holiday periods than throughout the rest of the year. We argue that this is due to higher costs of undertaking these kinds of product assortment activities during holiday periods. We discuss how this relates to the exiting literature on non-price adjustment and price rigidity.

Date: 2007-10
Note: View the original document on HAL open archive server: https://hal.science/hal-02387449
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Citations: View citations in EconPapers (5)

Published in Managerial and Decision Economics, 2007, 28 (7), pp.817-832. ⟨10.1002/mde.1379⟩

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Journal Article: Non-price rigidity and cost of adjustment (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02387449

DOI: 10.1002/mde.1379

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