Dynamic Pricing in Retail Gasoline Markets

Dynamic pricing in retail gasoline markets

world, all available information is used, price wars never happen, and the collusive constraint is always binding. This cannot be taken as a serious description of the world of gasoline retailing. It is plausible, however, that station operators, for example, recognize that reducing their own prices induces price cutting at rival stations. They also might reasonably expect that once price cutti...

Pricing in Retail Gasoline Markets

Dynamic pricing of electricity in retail markets

This paper aims at defining a dynamic and flexible tariff structure for a distribution company that protects the retail consumers against the excessive fluctuations of the wholesales market prices. We propose a two-stage pricing scheme that sets in a first-stage a time-of-use tariff that is corrected later by a dynamic component once the real-time demand has been observed. A personalized tariff...

Edgeworth Price Cycles, Cost-based Pricing and Sticky Pricing in Retail Gasoline Markets

This paper examines dynamic pricing behavior in retail gasoline markets for 19 Canadian cities over 574 weeks. I find three distinct retail pricing patterns: 1. standard cost-based pricing, 2. sticky pricing, and 3. steep, asymmetric retail price cycles that, while seldom documented empirically, resemble those of Maskin & Tirole [1988]. I use a Markov switching regression to estimate the preval...

Reinforcement Learning Applications in Dynamic Pricing of Retail Markets

In this paper, we investigate the use of reinforcement learning (RL) techniques to the problem of determining dynamic prices in an electronic retail market. As representative models, we consider a single seller market and a two seller market, and formulate the dynamic pricing problem in a setting that easily generalizes to markets with more than two sellers. We first formulate the single seller...