Regulation, competition and fraud: evidence from retail gas stations in Mexico

Julio Arteaga (julio.arteagagr@uanl.edu.mx) and Daniel Flores

MPRA Paper from University Library of Munich, Germany

Abstract: Mexican gas stations across the country buy and sell gasoline at regulated common prices. Therefore, authorities that set these prices do not take into account competition conditions of each market. In this paper we establish the effect of a regulated mark-up price as well as competition on the incentives that gas stations in Mexico have to dispense less amount of gasoline than what consumers pay for. The results of theoretical and empirical work indicate that a higher regulated mark-up price reduces the incentives of gas stations to cheat. Similarly, more intense competition among the retailers of a given market decreases the average shortage.

Keywords: gasoline pricing; regulation; competition; fraud (search for similar items in EconPapers)
JEL-codes: K42 L11 (search for similar items in EconPapers)
Date: 2010-10-18
New Economics Papers: this item is included in nep-cis, nep-com, nep-ene, nep-hme and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:34187

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