IDEAS home Printed from https://ideas.repec.org/a/ekm/repojs/v14y1994i4p537-547id1301.html
   My bibliography  Save this article

Electoral interests and price fluctuation in regulated markets

Author

Listed:
  • Claudio A. C. Paiva

Abstract

This paper builds on the theory of regulation developed by Stigler and Peltzman.According to these authors, a regulator chooses his/her strategy seeking to maximize politicalsupport from consumers and producers, viewing welfare and efficiency as secondary issues.This process determines a regulated price that is between the competitive and monopolisticlevels. Our paper develops a modified version of Peltzman’s model by considering the ideathat the regulator’s behaviour might change with the proximity of elections. The additionof a timing dimension to the problem and its implication for consumers, producers and theregulator’s behavior suggest that the optimal strategy now implies in a price cycle in regulatedindustries. The regulator has incentives to impose higher prices when elections are relativelyfar ahead and lower (real) prices in periods that immediately precede an important election.We show that the Brazilian gasoline market between 1969-1984 supports our results. JEL Classification: E31; D72; L71.

Suggested Citation

  • Claudio A. C. Paiva, 1994. "Electoral interests and price fluctuation in regulated markets," Brazilian Journal of Political Economy, Center of Political Economy, vol. 14(4), pages 537-547.
    • Handle: RePEc:ekm:repojs:v:14:y:1994:i:4:p:537-547:id:1301
    as

    Download full text from publisher

    File URL: https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/1301/1286
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Political economy; political business cycle; election; inflation; fuel;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ekm:repojs:v:14:y:1994:i:4:p:537-547:id:1301. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Brazilian Journal of Political Economy (Brazil) (email available below). General contact details of provider: https://centrodeeconomiapolitica.org/repojs/index.php/journal/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.