We use a rich and unique dataset of 20 million daily prices in groceries and supermarkets across the country to analyze stylized facts of the behaviour of consumer prices. Our findings are as follows: i) The median duration of prices is little over 2 months. Therefore, retail prices in Uruguay...

We analyze the effect of supermarket entry on the exit of small stores in the food retailing sector in Montevideo between 1998 and 2007. By using detailed geographical information about supermarkets and smaller stores we are able to identify the link between entrants and the exit of nearby small...

We propose a decomposition of the border effect in international trade by controlling for differences in competition in local markets. An extension of the Hotelling (1929) model shows that the availability of local substitutes increases price dispersion and biases the estimation of the border...

In recent years there has been a large increase in the empirical literature on price behavior. As new and detailed data sets become available, we observe a number of important studies on the microeconomic fundamentals of price setting by firms — mainly retailers — and their impact on...

The "border effect" literature finds that political borders have a very large impact on relative prices, implicitly adding several thousands of miles to trade. In this paper we show that the standard empirical specification suffers from selection bias, and propose a new methodology based on...

We offer a new mechanism for prices to deviate from the Law of One Price. If stores differ in the varieties offered in a given product category, prices diverge more often regardless of distance. A simple extension to the Hotelling (1929) explains this result. To have one difference in variety in...