Reproduktionsnotiz:
Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network
Entstehung:
Anmerkungen:
Includes bibliographical references (pages 36-39)
Beschreibung:
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. Keywords: sticky prices; managerial costs; dynamic structural estimation; ecommerce, JEL Codes: L11, C73, D21, L81