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Private Label Price Rigidity during Holiday Periods

Bar-Ilan University and Emory University Economics Working Paper No. 01-2005

12 Pages Posted: 20 Mar 2005  

Georg Müller

Litholink Corporation

Mark E. Bergen

University of Minnesota - Carlson School of Management

Shantanu Dutta

University of Southern California - Marshall School of Business

Daniel Levy

Bar-Ilan University - Department of Economics; Emory University - Department of Economics; Rimini Center for Economic Analysis

Date Written: February 14, 2005

Abstract

Using weekly retail transaction scanner price data from a large U.S. supermarket chain, we find significantly higher retail price rigidity for private label products than for nationally branded products during the Christmas and Thanksgiving holiday periods relative to the rest of the year. The finding cannot be explained by changes in holiday period promotional practices because we find that private label promotions appear to diminish at least as much as national brands. The increased rigidity of private label products relative to national brands is only partially accounted for by increased rigidity of wholesale prices. After ruling out other potential explanations, we suggest that the higher private label price rigidity might be due to the increased emphasis on social consumption during holiday periods, raising the customers' value of nationally branded products relative to the private labels.

Keywords: Price rigidity, holidays, private label, national brand, social consumption

JEL Classification: E12, E31, L11, L20, L16, M21, M31

Suggested Citation

Müller, Georg and Bergen, Mark E. and Dutta, Shantanu and Levy, Daniel, Private Label Price Rigidity during Holiday Periods (February 14, 2005). Bar-Ilan University and Emory University Economics Working Paper No. 01-2005. Available at SSRN: https://ssrn.com/abstract=683349 or http://dx.doi.org/10.2139/ssrn.683349

Georg Sebastian Müller

Litholink Corporation ( email )

2250 West Campbell Park Drive
Chicago, IL 60612
United States
312-243-0600 (Phone)

Mark E. Bergen

University of Minnesota - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States
612-624-1821 (Phone)

Shantanu Dutta

University of Southern California - Marshall School of Business ( email )

Hoffman Hall 701
Los Angeles, CA 90089-1427
United States
213-740-5038 (Phone)
213-740-7828 (Fax)

Daniel Levy (Contact Author)

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 5290002
Israel
+972 3 531-8345 (Phone)
+972 3 738-4034 (Fax)

HOME PAGE: http://econ.biu.ac.il/en/levy

Emory University - Department of Economics ( email )

1602 Fishburne Drive, Suite 306
Rich Building
Atlanta, GA 30322-0001
United States

HOME PAGE: http://economics.emory.edu/home/people/faculty/Levydaniel.html

Rimini Center for Economic Analysis ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

HOME PAGE: http://www.rcfea.org/

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