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Pricing Decisions in the Euro AreaHow Firms Set Prices and Why$
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Silvia Fabiani, Claire Suzanne Loupias, Fernando Manuel Monteiro Martins, and Roberto Sabbatini

Print publication date: 2007

Print ISBN-13: 9780195309287

Published to Oxford Scholarship Online: September 2007

DOI: 10.1093/acprof:oso/9780195309287.001.0001

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The Pricing Behavior of Dutch Firms

The Pricing Behavior of Dutch Firms

Survey Evidence on Price Stickiness

(p.140) 9 The Pricing Behavior of Dutch Firms
Pricing Decisions in the Euro Area

Marco Hoeberichts

Ad Stokman

Oxford University Press

Small Dutch firms adopt more rigid pricing policies, and the weaker the competition a firm faces, the stickier its prices will be. Furthermore, wholesale and retail prices are more flexible than those for business-to-business services. Menu costs and psychological pricing—two prominent explanations of price stickiness in the literature—are of minor importance. We also find clear evidence of asymmetries in shocks driving price increases and decreases.

Keywords:   Dutch firms, survey, price stickiness, small firms, menu costs, psychological pricing, asymmetries

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