Nobody "blinks" they just run out of pricing power. Raising prices due to inflation is not particularly different than trying to raise prices for any other rea

Nobody "blinks" they just run out of pricing power. Raising prices due to inflation is not particularly different than trying to raise prices for any other reason. What limits you doing it more is that you can't. So inflation is generally "eaten" by the least powerful actors in the system - those with the least ability to raise prices. In a loose sense, all pricing is a kind of negotiation. Inflation is messy and price updates take time to propagate due to stickiness, inertia, contracts, negotiation costs etc. Also psychology. It is very helpful if others in your industry announce they are raising prices... Many consumer facing businesses e.g., supermarkets, utilities, consumer SaaS can in theory raise prices instantly (subject to market forces, public opinion, regulation, etc). Workers on the other hand, need to switch jobs or wait for reviews. B2B companies and suppliers may need to wait for contract renewals. After the delays and messy details are taken into account what's left are market forces. This looks a lot like "who has the upper hand in pricing". New taxes are similarly complex and it is often not clear who will be able to pass them on and who will ultimately absorb them.