Informational Rigidities and the Stickiness of Temporary Sales
Informational Rigidities and the Stickiness of Temporary Sales (with Eric Anderson, Benjamin Malin, Emi Nakamura, and Duncan Simester)
Journal of Monetary Economics, 90, 64-83, October 2017.
While most price changes are temporary sales, retail prices respond to a wholesale cost increase entirely through the regular price. Temporary sales are governed by complex contingent contracts between manufacturers and retailers, determined substantially in advance.