| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP11753 |
| DP11753 Price Dynamics with Customer Markets | |
| Luigi Paciello; Andrea Pozzi; Nicholas Trachter | |
| 发表日期 | 2017-01-08 |
| 出版年 | 2017 |
| 语种 | 英语 |
| 摘要 | The customer base of a firm is an important and persistent determinant of its performance. Using rich U.S. data on consumer shopping behavior and good prices, we document that customer turnover is sensitive to price variation. Motivated by this finding, we study an economy where the customer base of a firm is persistent because of search frictions preventing customers from freely relocating across suppliers of consumption goods, and firms set prices under customer retention concerns. The key feature of our model is that the elasticity of the customer base to price -the extensive margin elasticity of demand- depends on the customers’ endogenous opportunity cost of search, and interacts with heterogeneity in firm productivity. More productive firms enjoy less customer attrition and lower elasticity of demand. An increase in customers search intensity leads to higher demand elasticity and lower prices. This provides a new channel affecting the relationship between consumer search and price markups in response to aggregate shocks. In particular, an increase in the utility of consumption relatively to the cost of search results in higher demand elasticity and lower prices, amplifying the effects of demand shocks on output. We highlight that the price response to demand shocks is heterogeneous across firms affecting dispersion in prices and consumption across consumers. |
| 主题 | Monetary Economics and Fluctuations |
| URL | https://cepr.org/publications/dp11753 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/540567 |
| 推荐引用方式 GB/T 7714 | Luigi Paciello,Andrea Pozzi,Nicholas Trachter. DP11753 Price Dynamics with Customer Markets. 2017. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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