Marketing researchers have traditionally modeled sales promotions by introducing a sales promotion dummy variable (sometimes accompanied by its interaction with prices) in the indirect utility specification. This approach has been useful in reproducing consumers' response to sales promotions but...

There is a rich literature in economics on factors that govern airline prices. With approximately 50% of airline tickets sold online, there is now a renewed interest in investigating airline pricing particularly amongst Information Systems (IS) researchers. While market transparency created by...

To model diffusion of new products in a way that is adequate to prescribe prices, we propose a modification of the standard random coefficients logit model that allows for changes in the distribution of the sample population due to differential adoption rates. Essentially, we use our structural...

A number of papers have evaluated demand and cost based explanations for the rapid growth and success of store brands. However there has been little empirical investigation of the strategic role of the retailer in facilitating the success of store brands. In this paper, we examine the pricing...

This paper analyzes adjustments in the Dutch retail gasoline prices. We estimate an error correction model on changes in the daily retail price for gasoline (taxes excluded) for the period 1996-2004 taking care of volatility clustering by estimating an EGARCH model. It turns out the volatility...

If producers have more information than consumers about goods' attributes, then they may use non-price (rather than price) adjustment mechanisms and, consequently, the market may reach a new equilibrium even if prices remain sticky. We study a situation where producers adjust the quantity (per...

This introductory essay briefly summarizes the eleven empirical studies of price setting and price adjustment that are included in this special issue. The studies, which use data from several European countries, were conducted as part of the European Central Bank's Inflation Persistence Network.

This paper reports the results of an ad hoc survey on price-setting behaviour conducted in February 2004 among 2,000 Belgian firms. The reported results clearly deviate from a situation of perfect competition and show that firms have some market power. Pricing-to-market is applied by a majority...

In this paper we explore the link between the intensity of product market competition and inflation rates across EU countries and sectors. We consider long-term averages of inflation rates in order to remove the cyclical behavior of inflation over time and as alternative proxies of competition...

In this paper we analyse the ability of time and state dependent price setting rules to explain durations of price spells or the probability of changing prices. Our results suggest that simple time dependent models cannot be seen as providing a reasonable approximation to the data and that state...