Arbeitspapier

New survey evidence on the pricing behaviour of Luxembourg firms

This paper analyses the pricing behaviour of Luxembourg firms based on survey evidence. Luxembourg firms typically have low market share, many competitors and longstanding customer relationships. Price discrimination is frequently applied. A majority of firms use price review rules that include elements of state dependency. The median firm reviews and changes prices twice a year. The results suggest an almost equal share of firms applying forwardlooking, backward-looking and rules of thumb behaviour. The adjustment speed is faster when cost goes up and demand goes down than in the opposite cases. The most relevant theories explaining price rigidity are implicit contracts, cost-based pricing and explicit contracts. Increases in labour and other costs are the most important factors leading to price increases; for price reductions it is price reductions by competitors followed by declining labour costs.

Sprache
Englisch

Erschienen in
Series: ECB Working Paper ; No. 617

Klassifikation
Wirtschaft
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
Semiparametric and Nonparametric Methods: General
Thema
adjustment speed
price rigidity
price setting
survey data
Preismanagement
Preisrigidität
Luxemburg

Ereignis
Geistige Schöpfung
(wer)
Lünnemann, Patrick
Mathä, Thomas Y.
Ereignis
Veröffentlichung
(wer)
European Central Bank (ECB)
(wo)
Frankfurt a. M.
(wann)
2006

Handle
Letzte Aktualisierung
12.07.2024, 13:22 MESZ

Objekttyp

  • Arbeitspapier

Beteiligte

  • Lünnemann, Patrick
  • Mathä, Thomas Y.
  • European Central Bank (ECB)

Entstanden

  • 2006

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