Do Rockets Rise Faster and Feathers Fall Slower in an Atmosphere of Local Market Power? Evidence from the Retail Gasoline Market PDF Download
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Author: Jeremy A. Verlinda
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of detailed station and local market level characteristics to determine the extent to which geographic and product differentiation influences price response asymmetry. I find that brand identity, proximity to rival stations, and local market features and demographics each influence a station's predicted price-response asymmetry. Web Appendix available at: http://ssrn.com/abstract=1000964.
Author: Jeremy A. Verlinda
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of detailed station and local market level characteristics to determine the extent to which geographic and product differentiation influences price response asymmetry. I find that brand identity, proximity to rival stations, and local market features and demographics each influence a station's predicted price-response asymmetry. Web Appendix available at: http://ssrn.com/abstract=1000964.
Author: Anna Olga Smolnik
Publisher: Cuvillier Verlag
ISBN: 3736984669
Category : Business & Economics
Languages : en
Pages : 124
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Book Description
The dissertation consists of three empirical studies and takes a closer look at price fluctuations using German gasoline prices as an example for a homogenous good. It analyzes consumers’ reaction to price fluctuations and respectively the pricing behavior of firms. The first paper, which was developed with co-authorship, explores consumers’ online price search effects on the pricing behavior of firms (gasoline price level and price dispersion). As regulators have recently implemented a mechanism for reporting all price changes to a central data base, the core assumption of this price reporting scheme is that the increase in price transparency will lead to a decline in the price level and a reduction in price dispersion. The second study addresses the question whether German gas stations adjust their retail prices asymmetrically in response to crude oil price changes, i.e., whether gas stations react quicker to crude oil price increases than to crude oil price decreases. The third study aims to analyze whether consumers react more strongly to gasoline price increases or to price decreases when considering buying a new vehicle.
Author: SYLWESTER BEJGER
Publisher: Wydawnictwo Naukowe Uniwersytetu Mikołaja Kopernika
ISBN: 8323137420
Category :
Languages : en
Pages : 53
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Book Description
[...] Analizując metody stosowane obecnie w obrocie prawnym dla potrzeb dowodowych w przedmiotowym obszarze, można poczynić dwie obserwacje: stosowane (i rekomendowane) ekonomiczne metody dowodowe dotyczące weryfikacji istnienia horyzontalnych zachowań antykonkurencyjnych są zasadniczo metodami jakościowymi, opartymi na obserwacji pewnych arbitralnie zestawionych czynników sprzyjających oraz ich interpretacji,precyzyjny katalog metod ilościowych w przedmiotowym zakresie nie jest objęty żadną jednolitą rekomendacją. W związku z tym spostrzeżeniem, głównym celem, jaki starano się zrealizować, było wypełnienie pewnej luki w stanie wiedzy związanej z aplikacją metody naukowej w zakresie ekonomicznych dowodów pośrednich niekonkurencyjnych zachowań horyzontalnych. Miarą realizacji tego celu jest, poddany pod osąd Czytelnika, stopień i jakość scalenia i wskazania związków pomiędzy aktualną wykładnią prawa, teorią ekonomii a integrowanymi w ramach omawianych metod narzędziami analiz ilościowych. To z kolei prowadzi do zarysowania propozycji instrumentarium badawczego horyzontalnych zachowań antykonkurencyjnych, obejmującego zarówno metody detektorowe, modelowanie strukturalne czy testy oparte na pomiarze siły rynkowej, jak i techniczno-aplikacyjną stronę implementacji wymienionych metod.
Author: Emmanuel Asane-Otoo
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
In this paper, we revisit the empirical observation that prices rise like rockets when input costs increase but fall like feathers when input costs decrease. The analysis draws on a novel dataset that include daily retail prices of gasoline and diesel from virtually all fuel stations in Germany over the period from January 1, 2014 to December 31, 2018. Our findings from the national, state-specific and station-level analyses based on an asymmetric error correction model indicate that asymmetric pricing is the norm rather than exception. Specifically, we find empirical evidence that points to a pervasive rockets-and-feathers pattern. We also find that asymmetric pricing in the German retail fuel market might partly be the consequence of tacit collusion among competitors as well as disparate search intensity on the part of consumers. We further show that temporal aggregation of station-level price data might lead to inaccurate inferences and could account for the contradictory findings in the extant literature.
Author: Jeremy A. Verlinda
Publisher:
ISBN:
Category : Gasoline
Languages : en
Pages : 64
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Author: George Deltas
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Using monthly data from the 48 contiguous states (except Nevada) for the 1988-2002 period, it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases. Moreover, markets with high average retail-wholesale margins experience a slower adjustment and a higher degree of asymmetry. These results are robust to whether or not an error correction term is used, and to a number of other specifications. Since gasoline is the only variable input, one could reasonably assume that average margins in a state reflect the degree of market power at the retail level. This suggests that sticky prices and response asymmetries in the gasoline market are, at least partially, a consequence of retail market power, raising the possibility that slow price adjustments and asymmetric price responses could be used as an indicator of potential departure from perfect competition. It is also shown that out-of-sample forecasts based on asymmetric models yield substantially better predictions for the path of retail prices than forecasts based on the symmetric models. This result is robust to different measures of forecast accuracy. The higher accuracy of the out-of-sample forecasts based on asymmetric models indicates that these asymmetries are not just an outcome of fitting to a particular sample but represent the underlying data generating process.
Author: Jeremy A. Verlinda
Publisher: BiblioGov
ISBN: 9781289031015
Category :
Languages : en
Pages : 62
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Book Description
This study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of detailed station and local market level characteristics to determine the extent to which spatial differentiation influences price response asymmetry. I find that brand identity, proximity to rival stations, bundling and advertising, operation type, and local market features and demographics each influence a station's predicted price-response asymmetry.
Author: Matteo Manera
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
This paper re-examines the issue of asymmetries in the transmission of shocks to crude oil prices onto the retail price of gasoline. Relative to the previous literature, the distinguishing features of the present paper are: i) use of updated and comparable data to carry out an international comparison of gasoline markets; ii) two-stage modeling of the transmission of oil price shocks to gasoline prices (first refinery stage and second distribution stage), in order to assess possible asymmetries at either one or both stages; iii) use of asymmetric error correction models to distinguish between asymmetries that arise from short-run deviations in input prices and from the speed at which the gasoline price reverts to its long-run level; iv) explicit, possibly asymmetric, role of the exchange rate, as crude oil is paid for in dollars whereas gasoline sells for different sums of national currencies; v) bootstrapping of F tests of asymmetries, in order to overcome the low-power problem of conventional testing procedures. In contrast to several previous findings, the results generally point to widespread differences in both adjustment speeds and short-run responses when input prices rise or fall.
Author: Cary A. Deck
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Zone pricing in wholesale gasoline markets is a contentious topic in the public policy debate. Refiners contend that they use zone pricing to be competitive with local rivals. Critics claim that zone pricing benefits the oil industry and harms consumers. With a controlled experiment, we investigate the competitive effects of zone pricing on consumers, retail stations, and refiners vis-a-vis the proposed policy prescription of uniform wholesale pricing to retailers. We also examine the issue of divorcement and the rockets and feathers phenomenon. The former is the legal restriction that refiners and retailers cannot be vertically integrated, and the latter is the perception that retail gasoline prices rise faster than they fall in response to random walk movements in the world price for oil.
Author: Robert William Bacon
Publisher:
ISBN: 9780948061332
Category : Petroleum industry and trade
Languages : en
Pages : 25
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