Abstract

http://ssrn.com/abstract=1817172
 
 

References (37)



 
 

Citations (19)



 


 



Asymmetric Price Adjustment and Consumer Search: An Examination of the Retail Gasoline Market


Matthew S. Lewis


affiliation not provided to SSRN

Summer 2011

Journal of Economics & Management Strategy, Vol. 20, Issue 2, pp. 409-449, 2011

Abstract:     
This article proposes a new explanation for why retail prices respond more quickly to cost increases than cost decreases. I develop a search model that assumes consumers’ expectations of prices are based on prices observed during previous purchases. This model predicts that consumers search less when prices are falling, which results in higher profit margins and a slower price response to cost changes. I then empirically examine patterns of retail gasoline price response and price dispersion to show that this model predicts observed price behavior better than previously suggested explanations.

Number of Pages in PDF File: 41

Accepted Paper Series





Date posted: April 21, 2011  

Suggested Citation

Lewis, Matthew S., Asymmetric Price Adjustment and Consumer Search: An Examination of the Retail Gasoline Market (Summer 2011). Journal of Economics & Management Strategy, Vol. 20, Issue 2, pp. 409-449, 2011. Available at SSRN: http://ssrn.com/abstract=1817172 or http://dx.doi.org/10.1111/j.1530-9134.2011.00293.x

Contact Information

Matthew S. Lewis (Contact Author)
affiliation not provided to SSRN
Feedback to SSRN


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References:  37
Citations:  19

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