Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/202383 
Authors: 
Year of Publication: 
2009
Series/Report no.: 
EAG Discussion Paper No. EAG 09-4
Publisher: 
U.S. Department of Justice, Antitrust Division, Economic Analysis Group (EAG), Washington, DC
Abstract: 
For decades the fact that input price hikes are passed on faster than input price cuts was thought to be well explained by the assumption that competitive firms fully pass on all input price changes, so they can't price asymmetrically, so asymmetric pricing behavior is limited to oligopolies, firms that do all sorts of bizarre things (finding yet another one being no big deal). However, Peltzman found no effect of concentration on such asymmetric pricing, raising the puzzle of why competitive industries generally price asymmetrically. This paper solves that puzzle.
Document Type: 
Working Paper

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