We reconsider the canonical model of price setting with menu costs by Ball and Romer (1990). Their original model …) assumption that demand shocks are common knowledge among price setters, we derive a unique symmetric threshold equilibrium where … endogenous adjustment of agents' beliefs regarding the aggregate price level. …

and margarine market. The magnitudes of promotional fees are then structurally estimated as price adjustment costs. Our …

We carry out an experiment on a macroeconomic price setting game where prices are complements. Despite relevant … information being common knowledge and price flexibility we observe significant deviation from equilibrium prices and history …. Our findings cast light on price dynamics when subjects have limited computational capacities. -- Inflation Persistence …

of the space of all price paths in time to the space of time-constant prices is sensible since the latter in general … contains Nash equilibria. We prove that the equilibrium price of the weakest active firm tends to marginal cost as the number …

This paper studies a monopolist firm selling a fixed capacity. The firm sets a price before demand uncertainty is … the associated benefits while charging a fixed price. Third, speculative behavior may generate incentives for the seller …

be driven down to marginal costs. However, many studies have subsequently observed the wide price dispersion online, and … its existence and persistence has now been well documented. Possible explanations of this price dispersion, derived mainly … using hedonic price models, have seen only modest success. In this paper, we propose an alternative competitive model, based …