Price Leadership and Coordination in Retail Gasoline Markets with Price Cycles

  title={Price Leadership and Coordination in Retail Gasoline Markets with Price Cycles},
  author={Matthew S. Lewis},
This study examines the coordination mechanism used by gasoline stations in the midwestern United States where prices exhibit highly cyclical fluctuations known as Edgeworth cycles. Stations in these markets repeatedly coordinate large marketwide price increases following periods of aggressive price undercutting. By studying these periodic price jumps both over time and across cities, I find that a particular retail chain in each city acts as a price leader initiating each price restoration… CONTINUE READING
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