The flood that caused a drought

To determine how an exogenous supply shock affects product availability, prices, and price-setting behavior, we analyzed a unique dataset representing natural experiment concerning the 2011 flood in Thailand, which affected production facilities of Western Digital, world's largest producer hard drives. The disaster impacted overseas inventory drives United States, where availability declined by more than 40% price indexes increased as much 38%. However, our findings suggest that such shocks, when transmitted to either substitute or complementary products, are likely be absorbed within networks.