Arbeitspapier

The Effects of Gasoline Price Regulations: Experimental Evidence

Economic theory suggests that gasoline retail markets are prone to collusive behavior. Oligopoly market structures prevail, market interactions occur frequently, prices are highly transparent, and demand is rather inelastic. A recent sector inquiry in Germany backed suspicions of tacit collusion and suggested to adopt regulatory pricing rules for gas stations similar to those implemented in Austria, parts of Australia, Luxembourg or parts of Canada. In order to increase consumer welfare these rules either restrict the number of price changes per day or they limit the mark‐up for gasoline retail prices. As theoretical predictions about the impact of these measures are mixed and empirical studies rare, we analyze the effects, using an experimental gasoline market in the lab. Our results reveal that two of the suggested rules rather decrease consumer welfare: The Austrian rule which only allows one price increase per day (while price cuts are always possible) and the Luxembourg rule which introduces a maximum markup for retailers. While no rule tends to induce lower retail prices, the Western Australian rule which allows at most one daily price change (no matter whether up or down) does at least not harm consumers.

ISBN
978‐3‐86304‐046‐8
Sprache
Englisch

Erschienen in
Series: DICE Discussion Paper ; No. 47

Klassifikation
Wirtschaft
Oligopoly and Other Imperfect Markets
Mining, Extraction, and Refining: Hydrocarbon Fuels
Retail and Wholesale Trade; e-Commerce
Industry Studies: Services: Government Policy
Regulated Industries and Administrative Law
Design of Experiments: General
Thema
Gasoline Prices
Fuel Prices
Experimental Gasoline Market
Fuel Price Regulation
Retail Price Regulation
Gas Stations

Ereignis
Geistige Schöpfung
(wer)
Haucap, Justus
Müller, Hans Christian
Ereignis
Veröffentlichung
(wer)
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
(wo)
Düsseldorf
(wann)
2012

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Haucap, Justus
  • Müller, Hans Christian
  • Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Entstanden

  • 2012

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