infonet-economy

We study a newly released data set of scanner prices for food products in a large Swiss online supermarket.
We find that average prices change about every two months, but when we exclude temporary sales,
prices are extremely sticky, changing on average once every three years. Non-sale price behavior is
broadly consistent with menu cost models of sticky prices. When we focus specifically on the behavior
of sale prices, however, we find that the characteristics of price adjustment seems to be substantially
at odds with standard theory.

Download at the NBER Website
http://www.nber.org/papers/w17126.pdf