We analyze a model in which traders have different trading opportunities and learn information from prices. The difference in trading opportunities implies that different traders may have different trading motives when trading in the same market—some trade for speculation and others for hedging—and thus they may respond to the same information in opposite directions. This implies that addin…
How does price sensitivity change with the macroeconomic environment? the authors explore this question by measuring price elasticity using household-level data across 19 groceries over 24 quarters..Printed Journal