Information , cost pass-through , consumer search , rockets and feathers
Abstract:
Recent theories aim at explaining asymmetric cost pass-through by different consumer search efforts depending on whether prices increase or decrease. This paper investigates the relation between price adjustments and consumer search intensity for the German electricity retail market utilizing a unique panel dataset comprising retail electricity prices and consumer search queries on price-comparison websites. The main findings are 1) consumers search less when prices fall than when they rise, 2) costs are passed-through asymmetrically and 3) controlling for search intensity particularly eliminates the asymmetry. This suggests that ‘Rockets and Feathers’ patterns may be explained by an omitted variable bias.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.