Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204807 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 13-2019
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
Abstract: 
Most of the literature on retail fuel markets find high-frequency and asymmetric price cycles. This is typically explained by the model of Edgeworth price cycles. A key element of this model is that prices fall to marginal costs during a cycle. It seems challenging to address this assumption empirically. However, I use a natural experiment in the German fuel market to analyze the effects of an external cost shock. I find strong evidence that prices do not fall to marginal costs. This is not in line with Edgeworth cycles and thus, should be taken into account when analyzing fuel markets.
Subjects: 
Edgeworth price cycles
Retail gasoline
Price effects
Natural experiment
Coordination
JEL: 
L11
L81
L91
K21
Q41
Document Type: 
Working Paper

Files in This Item:
File
Size
415.08 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.