A contract with K-class pricing divides a large set of goods or services into K classes and assigns a single price to any element of a class. Class pricing can be efficient when several different versions may be traded and it is costly to assign individual prices to all of them. It is more...

Explaining why prices do not immediately adjust to business cycles remains one of the most important unresolved questions in macroeconomics. When researchers ask managers for an explanation, their responses reveal a reluctance to vary prices for fear of quot;antagonizing customers.quot; However,...