demand and innovation, theory still lacks an analytical formulation. This paper proposes a model where demand is conceived as …

This paper proposes a theory of price rigidity consistent with survey evidence that firms stabilize prices out of … fairness to their consumers. The theory relies on two psychological assumptions. First, customers care about the fairness of … prices: fixing the price of a good, consumers enjoy it more at a low markup than at a high markup. Second, customers …

This paper proposes a theory of price rigidity consistent with survey evidence that firms stabilize prices out of … fairness to their consumers. The theory relies on two psychological assumptions. First, customers care about the fairness of … prices: fixing the price of a good, consumers enjoy it more at a low markup than at a high markup. Second, customers …