Behavioral sticky prices

• 成果类型: Article
• 署名作者: Rebelo, Sergio; Santana, Miguel; Teles, Pedro
• 署名单位: Northwestern University; National Bureau of Economic Research; Centre for Economic Policy Research - UK; Northwestern University; Bank of Canada; Banco de Portugal; Universidade Catolica Portuguesa; Universidade Catolica Portuguesa
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2025.103828
• 发表日期: 2025
• 关键词: large numbers; rationality; RIGIDITY; COSTS; LAW

摘要

We develop a model in which households make decisions using a dual-process framework. System 1 relies on fast, intuitive heuristics but is prone to error, while System 2 demands cognitive effort but yields more accurate decisions. Monopolistic firms can influence which system households engage through pricing. This strategic influence creates a novel source of price inertia. The model accounts for the rockets and feathers phenomenon (prices rise quickly but fall slowly), explains why firms with unexpectedly high demand often avoid price changes, and why hazard functions are downward sloping. Our model implies that price stability is not optimal.