Competition and petrol pricing in the smartphone era: Evidence from Singapore

Ming-Hua Liu, Dimitris Margaritis and Yang Zhang

Economic Modelling, 2016, vol. 53, issue C, 144-155

Abstract: This paper examines how pre-tax petrol and diesel prices in Singapore respond to changes in crude oil prices using an asymmetric error correction model. We pay particular attention to the effect increased use of smartphones may have had in altering the pattern of price adjustment as consumers become more informed about fuel prices and as search costs decline. The results suggest that increases in the use of smartphones and tablets have increased the estimated short-term response rate but only for the adjustment of retail prices to decreases in crude oil prices. We find no evidence of a smartphone effect for wholesale prices indicative of the different roles played by consumers in competition.

Keywords: Fuel pricing; Petrol price; Diesel price; Asymmetric adjustment; Price rigidity; Singapore (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:53:y:2016:i:c:p:144-155

DOI: 10.1016/j.econmod.2015.11.020

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