Why Prices Rise Faster than they Fall

Arbeitspapier

For decades the fact that input price hikes are passed on faster than input price cuts was thought to be well explained by the assumption that competitive firms fully pass on all input price changes, so they can't price asymmetrically, so asymmetric pricing behavior is limited to oligopolies, firms that do all sorts of bizarre things (finding yet another one being no big deal). However, Peltzman found no effect of concentration on such asymmetric pricing, raising the puzzle of why competitive industries generally price asymmetrically. This paper solves that puzzle.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EAG Discussion Paper ; No. EAG 09-4

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kimmel, Sheldon
• Event: Veröffentlichung
• (who): U.S. Department of Justice, Antitrust Division, Economic Analysis Group (EAG)
• (where): Washington, DC
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/202383
• Last update: 10.03.2025, 11:43 AM CET