Tuesday, February 21, 2017
Horacio Larreguy; Robert Rodriguez and Laura Trucco have written up Publishing Retail Prices in an Inflationary Context: Evidence from Argentina.
ABSTRACT: When inflation is high, the dispersion of prices across sellers of the same good increases, and both sellers and consumers lose sight of reference prices. As a result, the degree of competition in the market weakens. The government of Argentina, a country with a current 35% annual inflation rate, has recently launched a program that provides consumers with store-level daily-updated information on prices for goods sold in major supermarkets across the entire nation. In this project, we use a unique dataset with this rich information on daily geolocated prices in order to study the effect of publishing prices on competition across stores, and its consequences on price dispersion.