Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/196899 
Year of Publication: 
2019
Series/Report no.: 
ZEW Discussion Papers No. 19-018
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We examine the relation between consumer search and equilibrium prices when collusion is endogenously determined. We develop a theoretical model and show that average price is a U-shaped function of the measure of searchers: prices are highest when there are no searchers (local monopoly power) or when there are many searchers (and sellers opt to collude). We test this prediction with diesel retail prices in Dortmund, Germany. We estimate a U-shaped relation with statistical precision and a €.025/liter price variation due to the variation in the measure of searchers.
Subjects: 
Collusion
Cartelization
Fuel Retailing
Search
Competitive Intensity
JEL: 
L1
L4
L5
L9
Document Type: 
Working Paper

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