Search and equilibrium prices: theory and evidence from retail diesel


Cabral, Luís ; Schober, Dominik ; Woll, Oliver


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URL: https://madoc.bib.uni-mannheim.de/51717
URN: urn:nbn:de:bsz:180-madoc-517177
Document Type: Working paper
Year of publication: 2019
The title of a journal, publication series: ZEW Discussion Papers
Volume: 19-018
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: L1 , L4 , L5 , L9,
Keywords (English): Collusion , cartelization , fuel retailing , search , competitive intensity
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.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Cabral, Luís ; Schober, Dominik ; Woll, Oliver (2019) Search and equilibrium prices: theory and evidence from retail diesel. Open Access ZEW Discussion Papers Mannheim 19-018 [Working paper]
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