Identifying Algorithmic Pricing Technology Adoption in Retail Gasoline Markets

Stephanie Assad, Robert Clark, Daniel Ershov and Lei Xu

AEA Papers and Proceedings, 2022, vol. 112, 457-60

Abstract: While recent theoretical literature shows that algorithmic pricing (AP) may increase retail prices by facilitating collusive behavior, there has been no empirical evidence relating the adoption of AP technology to higher prices and/or collusion. One key reason is that information about firms' pricing technologies and their adoption of new pricing software is rarely available. In this paper, we use detailed price data from the German retail gasoline market, where AP was supposedly introduced in 2017. We show how to identify changes in pricing technology using structural breaks in pricing behaviors associated with AP.

JEL-codes: D21 D43 L12 L81 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1257/pandp.20221060

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