Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259358 
Year of Publication: 
2006
Series/Report no.: 
Working Paper No. 2006-04
Publisher: 
Bar-Ilan University, Department of Economics, Ramat-Gan
Abstract: 
There has been increasing interest in understanding how firms undertake non-price adjustment activities, especially in situations where prices may be rigid despite changes in market conditions. Using scanner price data for over 4,500 different food products from a large US supermarket chain, we document periods of rigidity in product additions and deletions: new products are less likely to be introduced, and existing products are less likely to be discontinued during holiday periods than throughout the rest of the year. We argue that this is due to higher costs of undertaking these kinds of product assortment activities during holiday periods. We discuss how this relates to the exiting literature on non-price adjustment mechanisms, cost of price adjustment, and price rigidity.
Subjects: 
non-price adjustment mechanism
cost of adjustment
price rigidity
holiday
product assortment
product introduction
product deletion
sticky price
rigid price
menu cost
JEL: 
D21
L20
M21
M31
L81
Document Type: 
Working Paper

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