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Costs of Managerial Attention and Activity as a Source of Sticky Prices: Structural Estimates from an Online Market / Sara Fisher Ellison, Christopher Snyder, Hongkai Zhang.
- Format:
- Book
- Author/Creator:
- Ellison, Sara Fisher.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w24680.
- NBER working paper series no. w24680
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Costs of Managerial Attention and Activity as a Source of Sticky Prices
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- We study price dynamics for computer components sold on a price-comparison website. Our fine-grained data--a year of hourly price data for scores of rival retailers--allow us to estimate a dynamic model of competition, backing out structural estimates of managerial frictions. The estimated frictions are substantial, concentrated in the act of monitoring market conditions rather than entering a new price. We use our model to simulate the counterfactual gains from automated price setting and other managerial changes. Coupled with supporting reduced-form statistical evidence, our analysis provides a window into the process of managerial price setting and the microfoundation of pricing inertia, issues of growing interest in industrial organization and macroeconomics.
- Notes:
- Print version record
- June 2018.
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