Opportunistic Behavior and Stability of Governances in Automotive Fuel Negotiations in the State of São Paulo (Brazil)

Selene Soares, Luiz Paulillo and Cecília Candolo

Journal of Economic Issues, 2013, vol. 47, issue 4, 983-1002

Abstract: This article evaluates the factors that influence the opportunistic behavior observed in the automotive fuel distribution sector (ethanol and gasoline) and the way this behavior has affected the stability of transactions between distributors and retail gas stations in the State of São Paulo (Brazil). The methodology we adopt in this study is logistic regression. Contracts analysis showed good results in reducing opportunism through fuel adulteration (-68.6 percent), and enforcement by distributors proved effective in curbing opportunism through noncompliance with agreements. We also found that time in the market is a factor conducive to opportunistic behavior, while the application of higher prices is a factor that discourages opportunism.

Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:mes:jeciss:v:47:y:2013:i:4:p:983-1002

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DOI: 10.2753/JEI0021-3624470409

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