Competition and Pass-Through: Evidence from Isolated Marketst

• 成果类型: Article
• 署名作者: Genakos, Christos; Pagliero, Mario
• 署名单位: University of Cambridge; Centre for Economic Policy Research - UK; Collegio Carlo Alberto; University of Turin
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20200863
• 发表日期: 2022
• 页码: 35-+
• 关键词: tax incidence; price-discrimination; gasoline; industry; entry; merger; COSTS; wages

摘要

We measure how pass-through varies with competition in isolated oligopolistic markets with captive consumers. Using daily pricing data from gas stations on small Greek islands, we study how unantic-ipated and exogenous changes in excise duties are passed through to consumers in markets with different numbers of retailers. We find that pass-through increases from 0.4 in monopoly markets to 1 in markets with four or more competitors and remains constant thereafter. The speed of price adjustment is about 60 percent higher in more com-petitive markets. Finally, we show that geographic market definitions based on measures of distance across sellers often result in signifi-cant overestimation of the pass-through. (JEL H22, H25, L13, L81)