Price Adjustments by a Gasoline Retail Chain

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...

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...

Price leadership and coordination in retail gasoline markets with price cycles

This study examines the coordination mechanism used by gasoline stations in the midwestern United States where prices exhibit highly cyclical fluctuations known as Edgeworth cycles. Stations in these markets repeatedly coordinate large marketwide price increases following periods of aggressive price undercutting. By studying these periodic price jumps both over time and across cities, I find th...

Pricing in Retail Gasoline Markets

CSEM WP 120 Asymmetric Price Adjustment and Consumer Search: An Examination of the Retail Gasoline Market

It has been documented that retail gasoline prices respond more quickly to increases in wholesale price than to decreases. However, there is very little theoretical or empirical evidence identifying the market characteristics responsible for this behavior. This paper presents a new theoretical model of asymmetric adjustment that empirically matches observed retail gasoline price behavior better...