search query: @author Bagwell, K. / total: 19
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Author: | Bagwell, K. |
Title: | Countercyclical pricing in customer markets |
Journal: | Economica
2004 : NOV, VOL. 71:284, p. 519-542 |
Index terms: | Microeconomics Pricing |
Language: | eng |
Abstract: | This article develops a dynamic model of price setting in customer markets that are subject to exogenous business cycle fluctuations. In the model, market demand alternates stochastically between boom and recession phases. A company faces a dynamic trade-off when selecting a price. While a higher price may raise a companys short-term profit, it also may diminish the companys reputation for low prices, leading to lower future profits. |
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