The Dynamics of Markups and Inventories in Retailing Firms
Опубликовано на портале: 17-09-2008
Review of Economic Studies. 1999. Vol. 66. No. 2. P. 275-308.
In this model, the existence of stockout probabilities and fixed ordering costs generate a cyclical price behavior characterized by long periods without nominal price changes and short periods with very low prices (i.e., sales promotions). He estimates this model using a unique longitudinal dataset with information about retail and wholesale prices, inventories, orders, and sales for several brands in a supermarket chain. Based on the estimated model, the author performs several counterfactual experiments that show the important role that inventories and fixed ordering costs play in the dynamics of retail prices and the frequency of sales promotions in this dataset.
applied econometrics inventory monopolistic competition retail industry retail pricing strategy sales promotion
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