Price rigidity in customer markets

Autor(en)

Jean-Robert Tyran, Renner Elke

Abstrakt

Customer markets are characterized by long-term relationships between buyers and sellers that evolve if buyers trust sellers to provide high quality and if sellers are trustworthy. However, changes in the terms of this implicit contract may antagonize customers and disrupt the relationship. We experimentally show that mutually beneficial long-term relationships frequently prevail in markets for experience goods and that price rigidity after a temporary cost shock is much more pronounced if price increases cannot be justified by cost increases. Hence, long-term relationships in customer markets mitigate market failure of the “lemons” type, but are prone to price stickiness.

Organisation(en)

Institut für Volkswirtschaftslehre, Wiener Zentrum für Experimentelle Wirtschaftsforschung

Externe Organisation(en)

University of Nottingham

Journal

Journal of Economic Behavior & Organization

Band

55

Seiten

575–593

Anzahl der Seiten

19

ISSN

0167-2681

DOI

https://doi.org/10.1016/j.jebo.2003.11.009

Publikationsdatum

2004

Peer-reviewed

Ja

ÖFOS 2012

502013 Industrieökonomik, 502045 Verhaltensökonomie

Link zum Portal

https://ucrisportal.univie.ac.at/de/publications/cabb8360-d71a-442a-b429-1f76df33e62f