Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - 2013 - Preliminary draft, 27 August 2013
implications arise: First, demand responses are more elastic for price increases than for price decreases and thus firms face a … downward-sloping demand curve that is kinked at the consumer s reference price. Second, changes in the consumer s recent … rational price expectations and hence in the consumer s reference price can alter demand through what we call the reference …
