Costs of Managerial Attention and Activity as a Source of Sticky Prices: Structural Estimates from an Online Market

Abstract

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Relative Price Dispersion: Evidence and Theory

“…We also want to rule out some simple explanations for relative price dispersion. In Appendix A, we show that relative price dispersion does not seem to be caused by managerial inattention (see, e.g., Ellison, Snyder and Zhang 2015). Indeed, if similar stores set systematically different prices for the same good because of inattention, we would expect relative price dispersion to be only a feature of low-ticket items.…”

“…A simple explanation for relative price dispersion is managerial inattention (see, e.g., Ellison, Snyder, and Zhang 2015). Equally expensive stores may set persistently different prices for the same good because managers choose to not pay much attention to the price of low-ticket items.…”

Relative Price Dispersion: Evidence and Theory

“…High-price and low-price goods A simple explanation for relative price dispersion is managerial inattention (see, e.g., Ellison, Snyder, and Zhang 2015). Equally expensive stores may set persistently different prices for the same good because managers choose to not pay much attention to the price of low-ticket items.…”

Much Ado About Nothing? Online Platform Price Parity Clauses and the EU Booking.com Case

“…Second, chain hotels possess managerial and organizational capabilities that allow to translate information into pricing strategies. There exists a large body of evidence documenting substantial managerial costs associated to the process of revising prices (Zbaracki et al, 2004;Ellison, Snyder and Zhang, 2018). Nonetheless, Kosová and Lafontaine (2012) underline that hotel and restaurant chains transfer to their franchisees a business format and method that helps them improving the effectiveness of their pricing decisions.…”

“…They show that this decision led to sharp price decreases. Finally, to a lesser extent, our article relates to the recent stream of literature documenting the characterizing features of online prices on the basis of scraped data (Cavallo, 2017;Ellison, Snyder and Zhang, 2018;Talavera, 2017, andGorodnichenko, Sheremirov andTalavera, 2018, inter alios). Whereas online prices are usually more flexible than offline ones, the patterns are qualitatively comparable.…”