The search result changed since you submitted your search request. Documents might be displayed in a different sort order.
  • search hit 8 of 56560
Back to Result List

Price-setting with quadratic adjustment costs

  • We test the price-setting behavior of firms using the Rotemberg (1982) model in order to explain puzzles in the New Keynesian Phillips curve (NKPC). For our tests, we conducted experiments that adapt the model into an individual decision-making problem. We find systematic deviations in price-setting according to the subjects’ degree of information acquisition. Subjects rarely make use of past information. On the other hand, subjects that decide to acquire relatively little information about future desired prices tend to overweight their own past set price when they set prices. We study the impact of this heterogeneous price-setting behavior for theoretically derived forward-looking Phillips curves. Our estimated NKPCs are in line with the empirical literature. The deviations from theoretical predictions in our NKPCs are driven by the less-informed subjects.

Export metadata

Additional Services

Search Google Scholar Statistics
Metadaten
Author details:Andreas OrlandORCiDGND, Michael W. M. RoosORCiDGND
DOI:https://doi.org/10.1016/j.jebo.2019.05.010
ISSN:0167-2681
ISSN:1879-1751
Title of parent work (English):Journal of economic behavior & organization
Subtitle (English):experimental evidence
Publisher:Elsevier
Place of publishing:Amsterdam
Publication type:Article
Language:English
Year of first publication:2019
Publication year:2019
Release date:2021/01/15
Tag:Experimental macroeconomics; Intertemporal optimization; Nominal frictions; Phillips curve
Volume:163
Number of pages:29
First page:88
Last Page:116
Organizational units:Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften / Fachgruppe Volkswirtschaftslehre
DDC classification:3 Sozialwissenschaften / 33 Wirtschaft
Accept ✔
This website uses technically necessary session cookies. By continuing to use the website, you agree to this. You can find our privacy policy here.