Cyclical Price Volatility: Role of Shopping Behavior and Customer Capital
I provide an explanation for the counter-cyclical price growth dispersion. I document two facts: (1) consumers switch more across sellers during a recession, and (2) sellers set higher prices after a growth in the customer base. I propose a mechanism, in which consumers switch faster to cheap sellers during a downturn. The price growth dispersion rises, because cheap sellers increase mark-ups, while expensive sellers reduce mark-ups. I build a model with consumer search and customer base to match facts (1) and (2). The model explains 30\% of the rise in price growth dispersion during the Great Recession.
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Sinha, Akshay K (Georgetown University, 2015)Recent literature aims at understanding the linkages between macroeconomic factors and renewable energy growth, at both global and national levels. Most of these studies have focused on determinants such as income levels ...