Skip to main content

Search costs, sticky prices and markups

Buy Article:

$55.00 plus tax (Refund Policy)


This article investigates how search costs, price stickiness and product durability influence the impact of inflation on firm markups. We provide evidence that each of these three factors plays an independent role in influencing the responsiveness of markups to inflation. Although we find that the direct effect of inflation on markups is negative, offsetting positive influences of inflation on markups arise in industries that produce durable experience goods with flexible prices. Thus, our results indicate that markups of industries producing nondurable search goods with sticky prices tend to experience unambiguously negative impacts from inflation.

Document Type: Research Article


Affiliations: 1: Graziadio School of Business and Management, Pepperdine University, 24255 Pacific Coast HighwayMalibuCA 90263-4100, USA 2: Hankamer School of Business, Baylor University, Box 8003WacoTX 76798-8003, USA

Publication date: 2011-07-01

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more