Abstract
We investigate the relationship between industrial market structure and price flexibility (the administered-pricing hypothesis) across United States manufacturing industries by embedding market-structure variables in a model relating relative price variability (dispersion) and inflation. While we find support for a positive relationship between variability and inflation, we do not find that high seller concentration lessens the impact of inflation on price variability. We do find that the larger the efficient-sized plant, the lower the impact of inflation on variability. We also find strong effects of input prices and degree of product durability on relative price variability.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 745-771 |
| Number of pages | 27 |
| Journal | Review of Industrial Organization |
| Volume | 9 |
| Issue number | 6 |
| DOIs | |
| State | Published - Dec 1994 |
Keywords
- Relative price variability
- administered pricing
- input-price pass-through
- market concentration
- product durability
ASJC Scopus subject areas
- Economics and Econometrics
- Strategy and Management
- Organizational Behavior and Human Resource Management
- Management of Technology and Innovation