HBS Pricing Lab
We study firm-level pricing decisions and capabilities to understand their micro and macroeconomic impacts.
Our lab collaborates with companies who share access to their proprietary datasets to obtain insights
on firm performance and the broader economic environment.
We are part of the Digital Data Design Institute at Harvard.
Current Projects
Cost-Passthrough and Retail Markups
Santiago Alvarez-Blaser, Alberto Cavallo, Alex Mackay and Paolo Mengano
Retail Price Discounts and the
Post-Pandemic Inflation Surge:
Evidence from Online Micro Data
Alberto Cavallo and Oleksiy Kryvtsov
Detecting Turning Points in Inflation:
A Structural Breaks Approach
Alberto Cavallo and Gaston Garcia Zavaleta
Our Team
Alberto Cavallo
Founder & Principal Investigator
Alexander MacKay
Founder & Principal Investigator
Paolo Mengano
Post-Doctoral Fellow
Michael Sullivan
Post-Doctoral Fellow
Santiago Alvarez-Blaser
Collaborator
Tomas Pacheco
Pre-doc Research Assistant
Gaston Garcia-Zavaleta
Post-Doctoral Fellow
Peter Nicolajsen
Research Manager
Latest Working Papers
- Large Shocks Travel FastAlberto Cavallo, Francesco Lippi and Ken Miyahara
We leverage the inflation upswing of 2022 and various granular datasets to identify robust price-setting patterns following a large supply shock. We show that the frequency of price changes increases dramatically after a large shock. We set up a parsimonious New Keynesian model and calibrate it to fit the steady-state data before the shock. The model features a significant component of state-dependent decisions, implying that large cost shocks incite firms to react more swiftly than usual, resulting in a rapid pass-through to prices–large shocks travel fast. Understanding this feature is crucial for interpreting recent inflation dynamics…. - Consumer Inertia and Market PowerAlexander MacKay and Marc Remer
We provide an empirical model to estimate the dynamic pricing incentives generated by consumer inertia (habit formation, search, brand loyalty, and switching costs). We show that these dynamic incentives can limit price increases after a merger, compared to the predictions from a static model…. - Dynamic Pricing and Demand Volatility: Evidence from Restaurant Food DeliveryAlexander MacKay, Dennis Svartbäck and Anders G. Ekholm
We study the staggered adoption of a dynamic pricing algorithm. We find that high-frequency pricing led to lower prices and lower demand volatility. Our findings indicate that consumers strategically time their purchases, and we highlight how firms can benefit from this strategic behavior through dynamic pricing that results in lower costs….
News and Events
Conference: “International Comparisons of Prices and Income“
Date: October 3-4th , 2024
Location: Harvard Business School, Boston.
We will cover the travel costs for one presenter per paper to attend the meeting, subject to HBS travel rules. The conference will include 10 research paper presentations on international price-comparison topics, broadly defined.
Submit your paper by August 1st:
https://hbs.qualtrics.com/jfe/form/SV_0kbWy0ZZd9D0wjI