We study a model in which a monopoly firm designs the quality profile of its inventory and then dynamically updates its pricing menu for a finite selling horizon to maximize revenue. In a counterfactual scenario, a social planner goes through the same process to maximize total welfare. We show...

We argue that dynamic pricing motivated by the management of inventory holding and ordering costs leads to increased operational efficiencies which could benefit firms without hurting consumers. To demonstrate this point, we equip the traditional economic order quantity (EOQ) setting with a rich...

We build a structural econometric model of pricing substitutes with menu costs and apply it to quasi-experimental data to estimate the share of physical menu costs (material and labor costs of price adjustment) in total menu costs. The data comes from the adoption of electronic shelf labels...