Spanish firms driven by costs, not market, in setting prices.
Spanish firms mainly set their prices based on changes in costs and market conditions. They use state-dependent rules or a mix of time and state-dependent rules for pricing. Price flexibility is influenced by energy input costs, competition intensity, and labor costs. The main reasons for price increases are cost changes, while market conditions drive price decreases. The most supported theories for price stickiness are implicit contracts, coordination failure, and explicit contracts.