Price Setting in a Leading Swiss Online Supermarket

33 Pages Posted: 20 Jun 2011

See all articles by Martin Berka

Martin Berka

School of Economics and Finance, Massey University; Open-economy macroeconomics programme, CAMA, ANU; Asian Bureau of Finance and Economic Research

Michael B. Devereux

University of British Columbia (UBC) - Department of Economics; Centre for Economic Policy Research (CEPR)

Thomas J. Rudolph

University of Illinois at Urbana-Champaign

Multiple version iconThere are 2 versions of this paper

Date Written: June 2011

Abstract

We study a newly released data set of scanner prices for food products in a large Swiss online supermarket. We find that average prices change about every two months, but when we exclude temporary sales, prices are extremely sticky, changing on average once every three years. Non-sale price behavior is broadly consistent with menu cost models of sticky prices. When we focus specifically on the behavior of sale prices, however, we find that the characteristics of price adjustment seems to be substantially at odds with standard theory.

Suggested Citation

Berka, Martin and Devereux, Michael B. and Rudolph, Thomas J., Price Setting in a Leading Swiss Online Supermarket (June 2011). NBER Working Paper No. w17126. Available at SSRN: https://ssrn.com/abstract=1866086

Martin Berka (Contact Author)

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Open-economy macroeconomics programme, CAMA, ANU

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Michael B. Devereux

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Centre for Economic Policy Research (CEPR)

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Thomas J. Rudolph

University of Illinois at Urbana-Champaign ( email )

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