OPTIMAL PRICE SETTING WITH OBSERVATION AND MENU COSTS

We study the price-setting problem of a firm in the presence of both observation and menu costs. The firm optimally decides when to "review" costly information on the adequacy of its price. Upon each review, the firm chooses whether to adjust its price, one or more times, before the next p...

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Bibliographic Details
Published in:The Quarterly journal of economics 2011-11, Vol.126 (4), p.1909-1960
Main Authors: Alvarez, Fernando E., Lippi, Francesco, Paciello, Luigi
Format: Article
Language:English
Subjects:
Adjustment
Anpassungskosten
Approximation
Costs
Economic costs
Economic models
Economic theory
Economic value
Fixed costs
Inflation
Inflation rates
Information
Market theory
Marketing
Menu costs
Modeling
Prediction models
Preismanagement
Price changes
Price level changes
Price theory
Prices
Pricing
Pricing policies
Statistics
Studies
Theorie
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