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Asymmetric fuel pricing in transition economies: The case of Moscow

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  • Bakytzhanova Zhuldyz

Abstract

Empirical studies (Bacon, 1991; Peltzman, 2000) show that output prices tend to respond faster to input price increases than to decreases. This paper finds out such asymmetry in the fuel market of Moscow and analyzes the influence of companies' and market characteristics on asymmetric response. The conclusion is that different mechanisms of the phenomenon, including tacit collusion and consumer search, probably coexist in the Moscow retail gasoline market.

Suggested Citation

  • Bakytzhanova Zhuldyz, 2005. "Asymmetric fuel pricing in transition economies: The case of Moscow," EERC Working Paper Series 05-18e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:05-18e
    as

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    References listed on IDEAS

    as
    1. John Michael Ian S. Salas, 2002. "Price Adjustments and Asymmetry in the Philippine Retail Gasoline Market," Industrial Organization 0209001, University Library of Munich, Germany.
    2. Severin Borenstein & Andrea Shepard, 2002. "Sticky Prices, Inventories, and Market Power in Wholesale Gasoline Markets," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 116-139, Spring.
    3. Davis, Michael C & Hamilton, James D, 2004. "Why Are Prices Sticky? The Dynamics of Wholesale Gasoline Prices," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(1), pages 17-37, February.
    4. Radchenko, Stanislav, 2005. "Oil price volatility and the asymmetric response of gasoline prices to oil price increases and decreases," Energy Economics, Elsevier, vol. 27(5), pages 708-730, September.
    5. Godby, Rob & Lintner, Anastasia M. & Stengos, Thanasis & Wandschneider, Bo, 2000. "Testing for asymmetric pricing in the Canadian retail gasoline market," Energy Economics, Elsevier, vol. 22(3), pages 349-368, June.
    6. Severin Boreinstein & Andrea Shepard, 1996. "Dynamic Pricing in Retail Gasoline Markets," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 429-451, Autumn.
    7. Bacon, Robert W., 1991. "Rockets and feathers: the asymmetric speed of adjustment of UK retail gasoline prices to cost changes," Energy Economics, Elsevier, vol. 13(3), pages 211-218, July.
    8. repec:bla:scandj:v:102:y:2000:i:1:p:101-21 is not listed on IDEAS
    9. repec:cdl:econwp:qt544216d9 is not listed on IDEAS
    10. Severin Borenstein & A. Colin Cameron & Richard Gilbert, 1997. "Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 305-339.
    11. Roland Bénabou & Robert Gertner, 1993. "Search with Learning from Prices: Does Increased Inflationary Uncertainty Lead to Higher Markups?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 69-93.
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    Cited by:

    1. Nodir Adilov & Hedayeh Samavati, 2009. "Pump Prices and Oil Prices: A Tale of Two Directions," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(1), pages 51-64, March.
    2. Robert Bacon & Masami Kojima, 2010. "Rockets and Feathers : Asymmetric Petroleum Product Pricing in Developing Countries," World Bank Publications - Reports 18287, The World Bank Group.

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    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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