Why Do Retail Prices Fall During Seasonal Demand Peaks?

Examining widely‐sold products across dozens of categories in a national scanner database, we find seasonality in demand is large—20 log points for the median category, and pervasive. At seasonal frequencies, price fluctuations are typically countercyclical but small—1.5 log points on average. For m...

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Publicado en:RAND Journal of Economics (Wiley-Blackwell) Vol. 56; no. 1; pp. 35 - 55
Autores principales: Butters, R. Andrew, Sacks, Daniel W., Seo, Boyoung
Formato: Artículo
Publicado: Wiley-Blackwell Spring2025
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: Why Do Retail Prices Fall During Seasonal Demand Peaks?
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          Butters, R. Andrew
          Sacks, Daniel W.
          Seo, Boyoung
        affil:
          Kelley School of Business, Indiana University
          Wisconsin School of Business, University of Wisconsin
      su:
        Elasticity (Economics)
        Retail industry
        Prices
        Price fluctuations
        Databases
      sug:
        subj:
          Elasticity (Economics)
          Retail industry
          Prices
          All other miscellaneous store retailers (except beer and wine-making supplies stores)
          All other miscellaneous general merchandise stores
          All Other Miscellaneous Store Retailers (except Tobacco Stores)
          Price fluctuations
          Databases
      keyword:
        countercyclical pricing
        demand
        price elasticity of demand
        seasonality
        countercyclical pricing
        demand
        price elasticity of demand
        seasonality
      ab: Examining widely‐sold products across dozens of categories in a national scanner database, we find seasonality in demand is large—20 log points for the median category, and pervasive. At seasonal frequencies, price fluctuations are typically countercyclical but small—1.5 log points on average. For most categories, we find seasonality in demand is driven by extensive margin changes in households purchasing any product in the category, and coincides with demand becoming more elastic as it peaks. These patterns suggest countercyclical pricing can be accounted for by demand‐side factors instead of requiring supply‐side explanations, or cross‐category pricing motives (e.g., "loss leader").
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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