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  • Past Event.
Apr 10

Andrea Pozzi, Einaudi Institute of Economics

Delivery Method: In Person
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Location:

Gerri C. LeBow Hall
722
3220 Market Street
Philadelphia, PA 19104

Registration Option:

General

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“Price of Dynamics with Customer Markets”

We provide new evidence of the relationship between rm pricing and customer dynamics. We build and quantify a model where rms choose prices taking into account their e ect on the evolution of their customer base, and customers face frictions to reallocate to other rms. The model accounts for salient features of retail price data, such as the high kurtosis of the price distribution and the low pass-through of cost shocks. We also study aggregate dynamics in our framework and show that microfounding customer reallocation leads to a countercyclical response of markups to demand shocks. JEL classi cation: E30, E12, L16 Keywords: customer markets, price setting, product market frictions

Disciplines

Economics
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Matthew Weinberg

(215) 571-4168

Gerri C. LeBow Hall 1029