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Whom to Inform about Prices? Evidence from the German Fuel Market

Author

Listed:
  • Felix Montag

    (Tuck School at Dartmouth College)

  • Alina Sagimuldina

    (LMU Munich)

  • Christoph Winter

    (EY-Parthenon)

Abstract

Combining a theoretical model of imperfect information with empirical evidence, we show how the effect of providing price information to consumers depends on how well informed they are beforehand. Theoretically, an increase in consumer information decreases prices more, the fewer ex ante informed consumers there are. Empirically, we study mandatory price disclosure in the German fuel market for two fuel types that differ in ex ante consumer information. The decline in prices is stronger when there are fewer ex ante informed consumers. The magnitude of the treatment effect declines over time but is intensified by local follow-on information campaigns.

Suggested Citation

  • Felix Montag & Alina Sagimuldina & Christoph Winter, 2023. "Whom to Inform about Prices? Evidence from the German Fuel Market," Rationality and Competition Discussion Paper Series 415, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:415
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    References listed on IDEAS

    as
    1. Stephanie Assad & Robert Clark & Daniel Ershov & Lei Xu, 2020. "Algorithmic Pricing and Competition: Empirical Evidence from the German Retail Gasoline Market," CESifo Working Paper Series 8521, CESifo.
    2. Jean-Francois Houde, 2012. "Spatial Differentiation and Vertical Mergers in Retail Markets for Gasoline," American Economic Review, American Economic Association, vol. 102(5), pages 2147-2182, August.
    3. Felix Montag & Alina Sagimuldina & Monika Schnitzer, 2021. "Does Tax Policy Work When Consumers Have Imperfect Price Information? Theory and Evidence," CESifo Working Paper Series 9138, CESifo.
    4. Martin, Simon, 2020. "Market transparency and consumer search - Evidence from the German retail gasoline market," DICE Discussion Papers 350, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Oschmann, Sebastian, 2025. "Vertical market structure matters: The case of a horizontal retail merger in the German gasoline market," DICE Discussion Papers 418, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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    More about this item

    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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