Jump to ContentJump to Main Navigation
Pricing Decisions in the Euro AreaHow Firms Set Prices and Why$
Users without a subscription are not able to see the full content.

Silvia Fabiani, Claire Suzanne Loupias, Fernando Manuel Monteiro Martins, and Roberto Sabbatini

Print publication date: 2007

Print ISBN-13: 9780195309287

Published to Oxford Scholarship Online: September 2007

DOI: 10.1093/acprof:oso/9780195309287.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2019. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 17 September 2019

Why Are Prices Sticky?

Why Are Prices Sticky?

Evidence from an Ad Hoc Survey in Belgium

Chapter:
(p.69) 4 Why Are Prices Sticky?
Source:
Pricing Decisions in the Euro Area
Author(s):

Luc Aucremanne

Martine Druant

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780195309287.003.0005

This chapter reports the results of a survey on price setting behavior conducted in 2004 among 2,000 Belgian firms. The results clearly deviate from a situation of perfect competition and show that firms have some market power. Prices are rather sticky, the average duration between two consecutive price reviews being ten months, whereas it amounts to thirteen months between two consecutive price changes, and both time-dependent and state-dependent behavior are observed. Evidence is found in favor of both nominal (mainly implicit and explicit contracts) and real rigidities (including flat marginal costs and counter-cyclical movements in desired mark-ups). The survey results point to a non-negligible degree of non-optimal price setting.

Keywords:   survey, price setting behavior, price rigidity, real rigidity, nominal rigidity, time-dependent pricing, state-dependent pricing

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .