Search Results
Showing results 1 to 1 of approximately 1.
(refine search)
Working Paper
A Dynamic Model of Price Signaling, Consumer Learning, and Price Adjustment
We examine a model of consumer learning and price signaling where price and quality are optimally chosen by a monopolist. We find that price signaling causes the firm to raise prices, lower quality, and dampen the degree to which it passes on cost shocks to price. We identify two mechanisms through which signaling affects pass-through and find that signaling can lead to asymmetric pass-through.