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Predatory Pricing: The Case Of The Retail Gasoline Market

  • JOHN M. BARRON
  • MARK A. LOEWENSTEIN
  • JOHN R. UMBECK

Allegations of predatory pricing by large refiners have been made repeatedly by dealers' representatives, who have advocated retail divorcement as a solution. The states of Maryland and Connecticut and the District of Columbia have passed strong divorcement laws, while a host of other state legislatures have considered such laws. Using a special set of price data on refiner-operated stations, and on their competitors in Maryland, this paper tests the hypothesis that refiners have preyed on dealers. The findings, which do not support the hypothesis, deny the validity of the predatory-pricing allegations. Copyright 1985 Western Economic Association International.

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Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 3 (1985)
Issue (Month): 3 (03)
Pages: 131-139

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Handle: RePEc:bla:coecpo:v:3:y:1985:i:3:p:131-139
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