Does Consumer Search Matter for Firm Markups?

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Show simple item record Gwin, Carl R. October 8, 2004
dc.description.abstract This study investigates the relationship between consumer search costs, inflation, and firm markups in retail trade by employing actual measures of search cost. Consistent with theory, results indicate that markups can be higher if search costs are higher and increases in inflation lead to increases in markups if search costs are sufficiently high. Two competing hypotheses on the link between inflation and markups, namely consumer search costs and alternatively long-term seller/buyer contracts, are then evaluated. As long-term contracts are rare in retail trade, this study's results make it hard to justify studying how inflation impacts firm markups without considering search costs. en
dc.relation.ispartofseries BaylorBusiness Economics: Working Papers Series en
dc.relation.ispartofseries 2004-052-ECO en
dc.subject Inflation en
dc.subject Markup en
dc.subject Search Cost en
dc.subject JEL Classification: D40 en
dc.subject JEL Classification: D83 en
dc.title Does Consumer Search Matter for Firm Markups? en
dc.type Working Paper en

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