An Empirical Investigation of the Determinants of Asymmetric Pricing

Marc Remer

No 201210, EAG Discussions Papers from Department of Justice, Antitrust Division

Abstract: This article empirically investigates the cause of asymmetric pricing: retail prices responding faster to cost increases than decreases. Using daily price data for over 11,000 retail gasoline stations, I nd that prices fall more slowly than they rise as a consequence of rms extracting informational rents from consumers with positive search costs. Premium gasoline prices are shown to fall more slowly than regular fuel prices but rise at the same pace, and this pricing pattern supports theories based upon competition with consumer search. Further testing also rejects focal price collusion as an important determinant of asymmetric pricing.

Pages: 29 pages
Date: 2012-11
New Economics Papers: this item is included in nep-com, nep-ene, nep-hme, nep-mkt and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.justice.gov/atr/public/eag/288447a.html (text/html)

Related works:
Journal Article: An empirical investigation of the determinants of asymmetric pricing (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:doj:eagpap:201210

Access Statistics for this paper

More papers in EAG Discussions Papers from Department of Justice, Antitrust Division Department of Justice Antitrust Division 450 Fifth Street NW Washington, DC 20530. Contact information at EDIRC.
Bibliographic data for series maintained by Tung Vu ().