Market Power in Retail Gasoline Markets

Pricing in Retail Gasoline Markets

Price Controls and Market Structure: Evidence From Gasoline Retail Markets

In this paper we study the effect of price floor regulations on the organization and performance of markets. The standard interpretation of the effects of these policies is concerned with short-run market distortions associated with excess supply. Since price controls prevent markets from clearing, they lead to higher prices. While this analysis may be correct in the short-run, it does not cons...

Dynamic pricing in retail gasoline markets

world, all available information is used, price wars never happen, and the collusive constraint is always binding. This cannot be taken as a serious description of the world of gasoline retailing. It is plausible, however, that station operators, for example, recognize that reducing their own prices induces price cutting at rival stations. They also might reasonably expect that once price cutti...

Sticky prices, inventories, and market power in wholesale gasoline markets

A model with costly adjustment of production and costly inventories implies that wholesale gasoline prices will respond with a lag to crude oil cost shocks. Unlike explanations that rely upon menu costs, imperfect information, or long-term buyer/seller relationships, this model also predicts that futures prices for gasoline will adjust incompletely to crude oil price shocks that occur close to ...

Price controls and competition in gasoline retail markets∗

We estimate the effect of a price floor regulation implemented in the Canadian province of Quebec beginning in 1997 and find that it substantially reduced the entry and exit of stations in local Quebec markets. We show that as a result of the policy, competition was higher and prices were lower in Quebec compared with a control group of unregulated markets in the neighboring province of Ontario...