Dynamic pricing in the spanish gasoline market: A tacit collusion equilibrium

Jordi Perdiguero García*

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

22 Citations (Scopus)

Abstract

During the last twenty years, the Spanish petrol market has undergone an intensive restructuration process; it has changed from being a state-owned monopoly to total liberalization and privatization. This liberalization process was accompanied by measures that facilitated the creation of a "national champion," the Repsol Group, which is a huge, vertically integrated company with a high market share in all the industry's segments. Using a dynamic model, this paper analyses whether the prices established by companies in the Spanish gasoline market, after the restructuration process, fits with a tacit collusion equilibrium. The empirical results show that a strategic behaviour of companies occurs and is compatible with a tacit collusion price strategy. So, the restructuration process does not seem to have introduced effective competition into the Spanish gasoline market.

Original languageEnglish
Pages (from-to)1931-1937
Number of pages7
JournalEnergy Policy
Volume38
Issue number4
DOIs
Publication statusPublished - Apr 2010

Keywords

  • Collusion
  • Dynamic games
  • Gasoline market

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