Understanding International Prices: Customers as Capital

Jaromir Nosal and Lukasz A. Drozd
Additional contact information
Lukasz A. Drozd: University of Pennsylvania, The Wharton School

No 1027, 2010 Meeting Papers from Society for Economic Dynamics

Abstract: This paper develops a new theory of pricing-to-market driven by sluggish market shares. Our key innovation is a capital theoretic model of marketing in which relations with the customers are valuable. We discipline the introduced friction using a unique prediction of the model about the low short-run and high long-run price elasticity of international trade flows, consistent with the data. The model accounts for several pricing implications that are puzzling for a large class of theories. The good performance on the quantities side is maintained.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Understanding International Prices: Customers as Capital (2012)
Working Paper: Understanding international prices: customers as capital (2008)
Working Paper: Understanding International Prices: Customers as Capital (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed010:1027

Access Statistics for this paper

More papers in 2010 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().