An Empirical Investigation of Price Setting

Yale University, New Haven CT

Investigators

Abstract

The project is to gather information on pricing policies by interviewing a large number of businesspeople responsible for pricing in many different types of businesses and then to report the results in articles and a book. The objective is to learn how prices are set and how they are adjusted when demand, costs, or financial conditions change. The hope is to contribute to theories of macroeconomics and industrial organization by providing knowledge of price formation and of the microeconomic mechanisms linking inflation to the general level of economic activity. I hope also to generate theoretical and empirical hypotheses that could be tested using other kinds of information, and especially quantitative data.