Strategic information disclosure in vertical markets

Marco Alderighi and Marcella Nicolini

International Journal of Industrial Organization, 2022, vol. 85, issue C

Abstract: We investigate the Italian fuel market after an asymmetric transparency rule the came into force allowing gas stations to conceal some price cuts on the governmental price comparison platform, hardly visited by customers but used by oil companies to monitor the market. As oil companies usually set retail prices, and gas stations are in charge of communication, the disclosure of price cuts induces rival wholesalers to behave less aggressively. Consequently, the prices of those gas stations which conceal information and those of their neighboring competitors are, on average, higher. Empirical findings support the conclusions of the strategic information disclosure argument, and they leave some room for complementary explanations, such as differences in costs or in profitability.

Keywords: Vertical markets; Strategic information disclosure; Asymmetric transparency rule; Retail fuel prices (search for similar items in EconPapers)
JEL-codes: L11 L71 L81 Q35 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:85:y:2022:i:c:s0167718722000625

DOI: 10.1016/j.ijindorg.2022.102886

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