On the effects of suggested prices in gasoline markets
- Author(s)
- Faber Riemer, Maarten Janssen
- Abstract
There is a widespread suspicion that suggested prices act as a focal point for individual firms when setting their prices. Oil companies announce suggested prices for gasoline stations in the Dutch retail market. We show that, compared to the gasoline spot market price, suggested prices contain additional information that explains retail price changes. We conclude that suggested prices have a horizontal coordinating effect in the sense that retail prices react to information that suggested prices contain and that is unrelated to firms’ costs (i.e., the information that firms use under normal competitive conditions).
- Organisation(s)
- Department of Economics
- External organisation(s)
- Charles River Associates
- Journal
- The Scandinavian Journal of Economics
- Volume
- 121
- Pages
- 676-705
- No. of pages
- 30
- ISSN
- 0347-0520
- DOI
- https://doi.org/10.1111/sjoe.12289
- Publication date
- 02-2018
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502013 Industrial economics
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/on-the-effects-of-suggested-prices-in-gasoline-markets(ee7b8f89-0c70-45c5-9b6e-742466f7c8a7).html