The article develops a new theory of pricing to market driven by dynamic frictions of building market shares. Our key innovation is a capital theoretic model of marketing in which relations with customers are valuable. We discipline the introduced friction using data on differences between short-run and long-run price elasticity of international trade flows. We show that the model accounts for several pricing “puzzles” of international macroeconomics. (JEL E13, F14, F31, F41, F44, M31)
No takes yet. Share an insight, caveat, or question.
Drozd et al. (2012) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: