| Abstract: | In this paper, we examine the impact of market structure (concentration) on three different characteristics of industrial pricing behavior: 1) the sensitivity of prices to cost and demand changes, 2) the speed of price adjustment, and 3) the asymmetry of price behavior. We find the relationship between concentration and the sensitivity of prices to cost changes to be the most robust one. Cost changes are less fully transmitted into prices in highly concentrated industries. Overall, differences in the pricing behavior across industries can be “explained” fairly well with industry differences in concentration, capital intensity, inventoriability, and the length of the production period. |
