What is price stickiness, and what does this have to do with Chanel bags?

In this post I am going to talk about price rigidities/stickiness.  What do economists mean about price rigidities and how do we test them?  

On the face of it this sounds pretty simple - if prices change often then there doesn’t seem to be much scope for them to be sticky.  But when we think about it a bit more this isn’t true - and thinking about why i…