Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We propose a strategic microfoundation for sticky prices. We model an environment in which a firm has better information than its consumers and show that, when many consumers are uninformed, it is optimal for the firm to offer sticky contracts or sticky prices. We establish this result in a general mechanism design framework that allows for non-linear pricing and screening. A virtue of our microfoundation is that it is compatible with a dynamic general equilibrium model. We then discuss the implications of this microfounded friction for welfare.