On the Economics of Branded Open Supply
AbstractBranded open supply regulations permit gasoline dealers to incur transportation costs to arbitrage price differences among terminal locations. This arbitrage increases the overall cost of transporting gasoline from refinery to consumer by substituting high-cost truck transport for cheap bulk transportation. This paper provides a simple model of how arbitrage can lead either to a less dense terminal network or, in some instances, to a less dense network of dealers than refiners would prefer. Enforceable exclusive supply agreements can increase inventory holding, provide protection against excessive price volatility, and reduce transportation costs. An end to such agreements will likely impair the ability of branded dealers to differentiate themselves from unbranded rivals.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.
Volume (Year): 10 (2003)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.tandfonline.com/CIJB20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marvel, Howard P, 1976. "The Economics of Information and Retail Gasoline Price Behavior: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1033-60, October.
- William Comanor & Jon Riddle, 2003. "The Costs of Regulation: Branded Open Supply and Uniform Pricing of Gasoline," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(2), pages 135-155.
- Deneckere, Raymond & Marvel, Howard P & Peck, James, 1997.
"Demand Uncertainty and Price Maintenance: Markdowns as Destructive Competition,"
American Economic Review,
American Economic Association, vol. 87(4), pages 619-41, September.
- Howard P. Marvel & Raymond Deneckere & James Peck, 1995. "Demand Uncertainty and Price Maintainance: Markdowns as Destructive Competition," Working Papers 018, Ohio State University, Department of Economics.
- Howard P. Marvel & Raymond Deneckere & James Peck, 1995.
"Demand Uncertainty, Inventories, and Resale Price Maintainance,"
019, Ohio State University, Department of Economics.
- Deneckere, Raymond & Marvel, Howard P & Peck, James, 1996. "Demand Uncertainty, Inventories, and Resale Price Maintenance," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 885-913, August.
- Marvel, Howard P, 1978. "Competition and Price Levels in the Retail Gasoline Market," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 252-58, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.