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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
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Citations: View citations in EconPapers (1)

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Journal Article: An empirical investigation of the determinants of asymmetric pricing (2015) Downloads
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