Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202403
Authors: 
Remer, Marc
Year of Publication: 
2012
Series/Report no.: 
EAG Discussion Paper No. 12-10
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.
Document Type: 
Working Paper

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