This paper studies firms' price-setting decision during a currency changeover. Buyers' difficulties with the new nominal price level create incentives to raise prices temporarily but doing so comes at the risk of damaging a seller's reputation in the long run. We model firms' trade-off and study...

This paper studies firms' price-setting decision during a currency changeover. Buyers' difficulties with the new nominal price level may create incentives to raise prices temporarily but doing so comes at the risk of damaging a seller's standing as a fair trader. We model firms' trade-off and...