Relative Price Dispersion: Evidence and Theory

We are grateful to Bob Hall for comments on some of our previous work that inspired the current project. We are grateful to Jim Albrecht, George Alessandria, Fernando Alvarez, Ken Burdett, Jeff Campbell, Glenn Ellison, Sarah Ellison, Doireann Fitzgerald, Gaetano Gaballo, Matthew Gentzkow, Jose Moraga-Gonzales, Erik Hurst, Nir Jaimovich, Boyan Jovanovic, Stephan Seiler, Rob Shimer, Randy Wright for useful comments. We are grateful to our audiences at the NBER Summer Institute (IO and Price Dynamics groups), Minnesota Macro Workshop, Canadian Macro Study Group, Philadelphia Search and Matching Workshop, Econometric Society, Chicago FRB/St.Louis FRB Workshop on Money, Banking, Payments and Finance, SED Annual Meeting, Bank of France Price Setting and Inflation Conference, EIEF Junior Conference in Macroeconomics, University of Pennsylvania (Wharton), University of Wisconsin at Madison, FRB Minneapolis, George Washington University, Universidad Torcuato di Tella, Universidad San Andres, UVA/Richmond FRB Research Jamboree. We thank the Kilts Center for Marketing and the Nielsen Company for sharing their data. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, the Federal Reserve System, or the National Bureau of Economic Research.