Rockets and Feathers Revisited: Asymmetric Retail Gasoline Pricing in the Era of Market Transparency

Emmanuel Asane-Otoo and Bernhard Dannemann

The Energy Journal, 2022, vol. 43, issue 6, 103-122

Abstract: In this paper, we revisit the empirical observation that prices rise like rockets when input costs increase but fall like feathers when input costs decrease. The analysis draws on a novel data set that includes daily retail prices of gasoline from 12,804 stations in Germany from January 1, 2014 to December 31, 2018. Our findings based on pooled-panel asymmetric error correction models indicate that the pattern of rockets and feathers is the norm rather than the exception. Our results further show that temporal aggregation of station-level price data leads to inaccurate inferences and could account for the inconclusive findings in the literature.

Keywords: Asymmetric Pricing; Market Transparency; Search Intensity; Tacit Collusion (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:43:y:2022:i:6:p:103-122

DOI: 10.5547/01956574.43.6.easa

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