Sticky Prices, Inventories, and Market Power in Wholesale Gasoline Markets  

Oleh:

Shepard, Andrea ; Borenstein, Severin

Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Rand Journal of Economics vol. 33 no. 1 (2002), page 116-139.
Topik: gasoline prices; sticky prices; inventories; market power; wholesale; gasoline markets

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: RR10.6 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

A model with costly adjustment of production and costly inventories implies that wholesale gasoline prices will respond with a lag to crude oil cost shocks. Unlike explanations that rely upon menu costs, imperfect information, or long - term buyer / seller relationships, this model predicts that futures prices for gasoline will adjust incompletely to crude oil price shocks that occur close to the expiration date of the futures contract. We test and confirm this implication. Examining wholesale price responses in 188 gasoline markets, we also find that firms with market power adjust prices more slowly than do competitive firms, consistent with the model.

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