Price Transmission in Vertical Markets: A Comment and an Extension
14 Pages Posted: 23 Jan 2013
Date Written: November 30, 1998
Abstract
This paper examines the impact of dynamic information acquisition by retailers, on the degree of asymmetric price transmission in vertical markets. We propose a generalization of the extant models of asymmetric price transmission, by endogenising the process of dynamic information acquisition. It is found that, this has a significant impact on the degree of asymmetry in the process of price transmission. A test of the functional form by using the restricted version of the model rejects the restricted model.
Keywords: Asymmetric price adjustments, Vertical markets, Non-linear system of equations
JEL Classification: C32, D43, Q13, Q18
Suggested Citation: Suggested Citation