Price Setting Behavior in Vietnam: Evidence from a Survey
The-Anh Pham *
Department of Economics, National Economics University, 207 Giai Phong Road, Hanoi, Vietnam
Mai-Huong Dinh
Department of Economics, National Economics University, 207 Giai Phong Road, Hanoi, Vietnam
*Author to whom correspondence should be addressed.
Abstract
The paper aims to investigate the price setting behavior of Vietnamese firms, by analyzing the results of a price survey. We find that it is costly and difficult for firms to discover their competitors’ prices, because of differentiation. The majority of firms review and change their prices both at regular intervals and in response to specific events, mainly taking into account current market developments. We also reveal that the customer relations and the existence of contracts are the two most important reasons for price rigidity. Lastly, firms seem to respond asymmetrically to positive and negative shocks.
Keywords: Price setting behavior, rigidity, survey data