Empirical Regularities of Asymmetric Pricing in the Gasoline Industry
نویسنده
چکیده
This paper analyzes the various econometric models that have been used to identify asymmetric pricing in the retail gasoline industry, and also documents empirical regularities in the market. I find that a standard error-correction model coupled with daily price data is best suited to analyze asymmetric price adjustments. Moreover, temporally aggregated data can severely bias parameter estimates. Asymmetric pricing is also found to be a market-wide phenomenon, and not the strategy of a firm acting independently of the market. In kind, a host of market characteristics that influence the speed of price adjustments are identified.
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