Abstract
The paper provides a formal model of price rigidities which is consistent with the observed difference in pricing across industries. The empirical test for a sample of Austrian manufacturing industries confirms the derived propositions. Concentration, inventoriability, export orientation, and disparities in firm size do not influence the price level directly but are shown to have an impact on the sensitivity of prices to demand and cost changes. Cost (demand) changes are less (more) fully transmitted into prices in concentrated industries.
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I am indebted to the participants of the Industrial Organization Conference held in Vienna in June 1992 and especially to Helmut Schuster and Karl Aiginger for valueble comments.
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Weiss, C.R. Market structure and pricing behaviour in Austrian manufacturing. Empirica 21, 115–131 (1994). https://doi.org/10.1007/BF01383975
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DOI: https://doi.org/10.1007/BF01383975