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Strategic information disclosure in vertical markets

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  • Alderighi, Marco
  • Nicolini, Marcella

Abstract

We investigate the Italian fuel market after an asymmetric transparency rule the came into force allowing gas stations to conceal some price cuts on the governmental price comparison platform, hardly visited by customers but used by oil companies to monitor the market. As oil companies usually set retail prices, and gas stations are in charge of communication, the disclosure of price cuts induces rival wholesalers to behave less aggressively. Consequently, the prices of those gas stations which conceal information and those of their neighboring competitors are, on average, higher. Empirical findings support the conclusions of the strategic information disclosure argument, and they leave some room for complementary explanations, such as differences in costs or in profitability.

Suggested Citation

  • Alderighi, Marco & Nicolini, Marcella, 2022. "Strategic information disclosure in vertical markets," International Journal of Industrial Organization, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:indorg:v:85:y:2022:i:c:s0167718722000625
    DOI: 10.1016/j.ijindorg.2022.102886
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    More about this item

    Keywords

    Vertical markets; Strategic information disclosure; Asymmetric transparency rule; Retail fuel prices;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

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