Title of article :
Marketshareandpricerigidity$
Author/Authors :
Isaac Kleshchelski، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2008
Abstract :
Survey evidenceshowsthatthemainreasonwhyfirmskeeppricesstableisthatthey
are concernedaboutlosingcustomersormarketshare.Weconstructageneral
equilibriummodelinwhichfirmscareaboutthesizeoftheircustomerbase.Firmsand
customers formlong-termrelationshipsbecauseconsumersincurcoststoswitch
sellers.Inanenvironmentwithsectoralproductivityshocks,weshowthatcostpass-
throughisanon-monotonicfunctionofthesizeofswitchingcosts.Specifically,prices
tend tobecomemorestableasthefractionofrepeatcustomersincreasesandthe
elasticityofthecustomerbasefalls
Keywords :
Price rigidityMarket shareCustomer relationsRealrigidities
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
