Multiproduct firms synchronize prices, challenging traditional assumptions on price rigidity.
The study looked at how prices change in stores that sell many products. They found that when one store changes the price of a product, other stores selling the same product change their prices at different times. However, within the same store, prices of different products change at the same time. This shows that price changes are staggered between stores but synchronized within a store. This suggests that price rigidity is mostly due to mechanical reasons, not because of differences in information.