Staggered and Synchronized Price Policies under Inflation: The Multiproduct Monopoly Case.

This paper analyzes the optimum pricing policies of a multiproduct monopoly in the presence of inflation and fixed costs of nominal price changes. The authors examine the conditions which lead to staggered or synchronized pricing policies when the timing of price changes is endogenous. Two aspects of the decision problem are emphasized: the interaction in the joint profit function between the prices of the various goods and the interactions in the costs of price adjustment. The authors show that with positive interactions in the profit function and costs of price adjustments that are independent across products, staggering is unlikely. Copyright 1992 by The Review of Economic Studies Limited.