Price coordination in retail gasoline markets
On Tuesday 9 April 2019 Mai Nguyen-Ones will hold a trial lecture on a prescribed topic and defend her thesis for the PhD degree at NHH.
Prescribed topic for the trial lecture:
Market power in oligopolistic markets
10:15 in Jebsen Centre, NHH
Title of the thesis:
Essays on Retail Prices
This thesis is about retail prices and factors that are related to firms’ retail pricing behavior. The thesis contains four chapters.
Consumers leave increasingly more digital footprints which improve firms’ ability to practice personalized pricing (first-degree price discrimination). Chapter one theoretically investigates whether there exist strategic effects that reduce firms’ incentives to do so. The key insight is that a firm’s incentives to undertake strategic price-softening behavior depend on the rival's choice between uniform and personalized pricing, not the firm’s own choice.
Chapter two empirically examines how price coordination and coordination on price restorations is carried out in retail gasoline markets. In the studied market, one firm breaches a fourteen-year lasting price cycle by publicly announcing a change to its retail price policy. The author shows that a new way to coordinate prices and synchronize price restorations inter-brand and across local markets has emerged, using prior announcements of the price leader’s recommended price as a signaling device.
Chapter three analyzes how regular days off from competition and a time-dependent price pattern affect firm performance, and further examines the effects on firms' profitability from consumers’ search- and timing behavior. They find that an additional weekly day off from competition increases firm performance. While a conventional price search of where to buy reduces firms’ profitability, consumers who spend effort on when to buy have a positive impact on firms’ profitability.
Chapter four applies detailed daily data at the station level to estimate a structural model to uncover the degree of competition in the gasoline retail market. Endowed with station-level information the authors take into account the main drivers of differentiation at the local market level. Findings suggest that retailers do exercise some market power. Local station characteristics significantly affect to which extent stations are able to extract market power.
12:15 in Jebsen Centre, NHH
Member of the evaluation committee:
Associate Professor Malin Arve (leader of the committee), Department of Business and Management Science, NHH
Research Director Céline Bonnet, Toulouse School of Economics
Professor Claudine Desrieux, University Paris II
Professor Øystein Foros (main supervisor), Department of Business and Management Science, NHH
Associate Professor Arnt Ove Hopland, Department of Business and Management Science, NHH
The trial lecture and thesis defence will be open to the public. Copies of the thesis will be available from firstname.lastname@example.org