Price Matching And The Domino Effect In A Retail Gasoline Market
Abstract"Using gasoline station price data collected eight times per day for 103 d for 27 stations in Guelph, Ontario, it is found that, consistent with an informal theory of competitive gasoline pricing, stations set prices to match a small number of other stations. However, these matched stations are not necessarily the closest. While retailers frequently respond to price changes within 2 h, many take considerably longer. Finally, while price decreases do ripple across the market like falling dominos, increases propagate across the city based more on geographic location and source of price control than on proximity to leaders of these increases. "("JEL "L13, L40, L81) Copyright (c) 2008 Western Economic Association International.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 47 (2009)
Issue (Month): 3 (07)
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Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
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- Wills-Johnson, Nick & Bloch, Harry, 2010. "A simple spatial model for Edgeworth Cycles," Economics Letters, Elsevier, vol. 108(3), pages 334-336, September.
- Matthias Firgo & Dieter Pennerstorfer & Christoph Weiss, 2012. "Centrality and Pricing in Spatially Differentiated Markets: The Case of Gasoline," WIFO Working Papers 432, WIFO.
- Juan Jiménez & Jordi Perdiguero, 2011. "Does Accessibility Affect Retail Prices and Competition? An Empirical Application," Networks and Spatial Economics, Springer, vol. 11(4), pages 677-699, December.
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