Retail price fixity as a facilitating mechanism

American Journal of Agricultural Economics

Volumn 87, Issue 1, 2005, Pages 85-102

  Richards, Timothy J ^a   Patterson, Paul M ^a  

^a ARIZONA STATE UNIVERSITY   (United States)

Author keywords

Collusion; Ordered probit; Price fixity; Repeated game; Supermarkets; Trigger strategy

Indexed keywords

COMPETITION (ECONOMICS); CONCEPTUAL FRAMEWORK; PRICE DETERMINATION; RETAILING; THEORETICAL STUDY;

EID: 13944281413     PISSN: 00029092     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.0002-9092.2005.00704.x     Document Type: Article

References (62)

1. Abreu, D., D. Pearce, and E. Stacchetti. "Optimal Cartel Equilibria with Imperfect Monitoring." Journal of Economic Theory 39(1986):251-69.
2. Akerlof, G.A., and J. Yellen. "A Near-Rational Model of the Business Cycle with Wage and Price Inertia." Quarterly Journal of Economics 100(1985):823-38.
3. Ball, L., and D. Romer. "Sticky Prices as a Coordination Failure." American Economic Review 81(1991):539-52.
4. Bils, M. "Pricing in a Customer Market." Quarterly Journal of Economics 104(1989):699-718.
5. Blinder, A., E. Canetti, D. Lebow, and J. Rudd. Asking about Prices: A New Approach to Understanding Price Stickiness. New York: Russell Sage Foundation, 1998.
6. Bliss, C. "A Theory of Retail Pricing." Journal of Industrial Economics 36(1988):375-91.
7. Brander, J.A., and Z. Zhang. "Market Conduct in the Airline Industry: An Empirical Investigation." Rand Journal of Economics 21(1990):567-83.
8. Bresnahan, T. "Competition and Collusion in the American Automobile Industry: The 1955 Price War." Journal of Industrial Economics 35(1987):457-83.
9. Caballero, R., and E. Engel. "Explaining Investment Dynamics in U.S. Manufacturing: A Generalized (S, s) Approach." Econometrica 67(1999):783-826.
10. Caplin, A.S., and D. Spulber. "Menu Costs and the Neutrality of Money." Quarterly Journal of Economics 102(1987):703-26.
11. Cecchetti, G. "The Frequency of Price Adjustment: A Study of Newsstand Prices of Magazines." Journal of Econometrics 31(1986):255-74.
12. Cooper, R., and A. John. "Coordinating Coordination Failures in Keynesian Models." Quarterly Journal of Economics 103(1988):441-63.
13. Cotterill, R.W., and W.P. Putsis, Jr. "Market Share and Price Setting Behavior for Private Labels and National Brands." Review of Industrial Organization 17(2000):17-39.
14. Davidon, W.C. Variable Metric Method for Minimization A.E.C. Research and Development Report, ANL-5990. 1959.
15. Dhar, T.P., and R.W. Cotterill. "Two Stage Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market." Paper presented at AAEA annual meeting, Long Beach, CA, 28-31 July 2002.
16. Farrell, J., and E. Maskin. "Renegotiation in Repeated Games." Games and Economic Behavior 1(1989):327-60.
17. Friedman, J. "A Noncooperative Equilibrium for Supergames. Review of Economic Studies 28(1971):1-12.
18. Fudenberg, D., and E. Maskin. "The Folk Theorem in Repeated Games with Discounting and with Incomplete Information." Econometrica 54(1986):533-54.
19. Gasmi, F., J.J. Laffont, and Q.H. Vuong. "An Econometric Analysis of Collusive Behavior in a Soft-Drink Market." Journal of Economics and Management Strategy 1(1992):277-311.
20. Green, E.J., and R.H. Porter. "Noncooperative Collusion under Imperfect Price Information." Econometrica 52(1984):87-100.
21. Greene, W.H. Econometric Analysis, 3rd ed. Upper Saddle River NJ: Prentice-Hall, 1997.
22. Giulietti, M., and M. Waterson. "Multiproduct Firms' Pricing Behaviour in the Italian Grocery Trade." Review of Industrial Organization 12(1997):817-32.
23. Haltiwanger, J., and J.E. Harrington. "The Impact of Cyclical Demand Movements on Collusive Behavior." Working paper, Dept. of Economics, Johns Hopkins University, 1988.
24. Hajivassiliou, V.A. "Testing Game-Theoretic Models of Price-Fixing Behavior." Discussion paper, Cowles Foundation for Research in Economics, Yale University, December, 1989.
25. Heckman, J. "Sample Selection Bias as a Specification Error." Econometrica 47(1979):153-61.
26. Holton, R.H. "Price Discrimination at Retail: The Supermarket Case." Journal of Industrial Economics 6(1957):13-32.
27. Iwai, K. Disequilibrium Dynamics: A Theoretical Analysis of Inflation and Unemployment. Cowles Foundation Monograph #27. New Haven: Yale University Press. 1981.
28. Koontz, S.R., P. Garcia, and M.A. Hudson. "Meatpacker Conduct in Fed Cattle Pricing: An Investigation of Oligopsony Power." American Journal of Agricultural Economics 75(1993):537-48.
29. Lal, R., and C. Matutes "Retail Pricing and Advertising Strategies." Journal of Business 67(1994):345-70.
30. Lee, L.F., and R.H. Porter. "Switching Regression Models with Imperfect Sample Separation Information-With an Application on Cartel Stability." Econometrica 52(1984):391-418.
31. Levy, D., M. Bergen, S. Dutta, and R. Venable. "The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains." Quarterly Journal of Economics 112(1997):791-825.
32. Liang, J.N. "Price Reaction Functions and Conjectural Variations: An Application to the Breakfast Cereal Industry." Review of Industrial Organization 4(1986):31-58.
33. Mankiw, G. "Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly." Quarterly Journal of Economics 100(1985):529-37.
34. Martin, C. "Price Adjustment and Market Structure." Economics Letters 41(1993):139-43.
35. Means, G.C. "Notes on Inflexible Prices." American Economic Review 26(1936):23-35.
36. Mischel, K. "Sticky Prices as a Coordination Success." Atlantic Economic Journal 26(1998):162-71.
37. Nevo, A. "Measuring Market Power in the Ready-to-Eat Cereal Industry." Econometrica 69(2001):307-42.
38. Okun, A. Price and Quantities: A Macroeconomic Analysis. Washington DC: Brookings Institute, 1981.
39. Porter, R.H. "A Study of Cartel Stability: The Joint Executive Committee 1880-1886." Bell Journal of Economics 14(1983):301-14.
40. Porter, R.H. "On the Incidence and Duration of Price Wars." Journal of Industrial Economics 33(1985):415-26.
41. Prais, S.J., and C.B. Winsten. "Trend Estimators and Serial Correlation." Discussion paper, Cowles Commission, Chicago, 1954.
42. Reimer, J., and J.M. Connor. "Market Conduct in the U.S. Ready-to-Eat Cereal Industry." Paper presented at AAEA annual meeting, Long Beach, CA, 28-31 July 2002.
43. Richards, T.J., P.M. Patterson, and R. Acharya. "Price Behavior in a Dynamic Oligopsony: the Case of Washington Potatoes."American Journal of Agricultural Economics 13(2001):259-71.
44. Richards, T.J., and P.M. Patterson. "Retail Price Fixity: Causes and Consequences." Journal of Economics and Business 56(2004):117-36.
45. Rotemberg, J. "Sticky Prices in the United States." Journal of Political Economy 90(1982):1187-211.
46. Rotemberg, J., and G. Saloner. "A Supergame-Theoretic Model of Price Wars during Booms." American Economic Review 76(1986):390-407.
47. Seshinski, E., and Y. Weiss "Inflation and the Costs of Price Adjustment." Review of Economic Studies 44(1977):287-303.
48. Shonkwiler, J.S., and T.G. Taylor. "Food Processor Price Behavior: Firm-Level Evidence of Sticky Prices." American Journal of Agricultural Economics 70(1988):239-44.
49. Sexton, R.J., and M. Zhang. "A Model of Price Determination for Fresh Produce with Application to California Iceberg Lettuce." American Journal of Agricultural Economics 78(1996):924-34.
50. Slade, M.E. "Strategic Pricing Models and Interpretation of Price-War Data." European Economic Review 34(1990):524-37.
51. Slade, M.E. "Product Rivalry with Multiple Strategic Weapons: An Analysis of Price and Advertising Competition." Journal of Economics and Management Strategy 4(1995):445-76.
52. Slade, M.E. "Optimal Pricing with Costly Adjustment: Evidence from Retail-Grocery Prices." Review of Economic Studies 65(1998):87-107.
53. Slade, M.E. "Sticky Prices in a Dynamic Oligopoly: An Investigation of (s, S) Thresholds." International Journal of Industrial Organization 17(1999):477-511.
54. Stanford, W.G. "Subgame Perfect Reaction Function Equilibria in Discontinuous Duopoly Supergames are Trivial." Journal of Economic Theory 39(1986):226-32.
55. Stiglitz, J. "Price Rigidities and Market Structure." American Economic Review: Papers and Proceedings 74(1984):350-55.
56. Sweezy, P.M. "Demand under Conditions of Oligopoly." Quarterly Journal of Economics 47(1939):568-73.
57. U.S. Department of Agriculture, National Agricultural Statistics Service. Market News Service. Washington DC, various issues.
58. U.S. Department of Labor, Bureau of Labor Statistics. Wages, Earnings and Benefits. Washington DC, various issues.
59. Warner, E., and R. Barsky. "The Timing and Magnitude of Retail Store Markdowns: Evidence from Weekends and Holidays." Quarterly Journal of Economics 101(1995):321-52.
60. Washington Apple Grower's Clearing House. Annual Report. Wenatchee, WA, 2000.
61. Willis, J.L. "Estimation of Adjustment Costs in a Model of State-Dependent Pricing." Working paper, Research Division, Federal Reserve Bank of Kansas City, 2000.
62. Zbaracki, M.J., M. Ritson, D. Levy, S. Dutta, and M. Bergen. "The Managerial and Customer Dimensions of the Cost of Price Adjustment: Direct Evidence from Industrial Markets." Unpublished, 2000.