Price rigidity fails to explain price dispersion, challenging economic models.
The study analyzed price data from stores in Israel to understand how long prices stay the same and how this affects price differences. The researchers found that prices typically stay unchanged for more than 7.5 months, longer than previously thought. Surprisingly, they discovered that the frequency of price changes doesn't seem to affect price differences, and changes in inflation rates don't lead to more price variation. These results challenge traditional ideas about how prices are set and how they vary between stores.