Abstract

http://ssrn.com/abstract=246883
 
 

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Why Don't Prices Rise During Periods of Peak Demand? Evidence from Scanner Data


Judith A. Chevalier


Yale School of Management; National Bureau of Economic Research (NBER)

Anil K. Kashyap


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Peter E. Rossi


University of California, Los Angeles (UCLA) - Anderson School of Management

October 2000

NBER Working Paper No. w7981

Abstract:     
We examine the retail prices and wholesale prices of a large supermarket chain in Chicago over seven and one-half years. We show that prices tend to fall during the seasonal demand peak for a product and that changes in retail margins account for most of those price changes; thus we add to the growing body of evidence that markups are counter-cyclical. The pattern of margin changes that we observe is consistent with loss leader' models such as the Lal and Matutes (1994) model of retailer pricing and advertising competition. Other models of imperfect competition are less consistent with retailer behavior. Manufacturer behavior plays a more limited role in the counter-cyclicality of prices.

Number of Pages in PDF File: 65

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Date posted: October 21, 2000  

Suggested Citation

Chevalier, Judith A. and Kashyap, Anil K. and Rossi , Peter E., Why Don't Prices Rise During Periods of Peak Demand? Evidence from Scanner Data (October 2000). NBER Working Paper No. w7981. Available at SSRN: http://ssrn.com/abstract=246883

Contact Information

Judith A. Chevalier (Contact Author)
Yale School of Management ( email )
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Anil K. Kashyap
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7260 (Phone)
773 702-0458 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
773-702-7260 (Phone)
773-702-0458 (Fax)
Peter E. Rossi
University of California, Los Angeles (UCLA) - Anderson School of Management ( email )
110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
773-294-8616 (Phone)
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