Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/193704
Authors: 
Heim, Sven
Year of Publication: 
2019
Series/Report no.: 
ZEW Discussion Papers 16-070
Abstract: 
In many markets prices react stronger to rising than to falling costs. This asymmetric cost pass-through is still not fully understood, but recent theories suggest that asymmetric adjustments of consumers’ search efforts to rising and to falling prices may help to explain this. I use novel panel data to investigate the interaction of consumer search intensity, pricing and cost pass-through in the German residential electricity markets. I find that consumers search slightly more when prices rise but drastically decrease search efforts when they fall. Moreover, I find direct evidence that cost pass-through heavily depends on consumers’ search efforts.
Subjects: 
Consumer Search
Cost Pass-through
Rockets and Feathers
JEL: 
D83
L11
Document Type: 
Working Paper
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