Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Law
Experimental Gasoline Markets, Cary A. Deck, Bart J. Wilson
Experimental Gasoline Markets, Cary A. Deck, Bart J. Wilson
Economics Faculty Articles and Research
Zone pricing in wholesale gasoline markets is a contentious topic in the public policy debate. With a controlled laboratory experiment, we investigate the competitive effects of zone pricing on consumers, retail stations, and refiners vis-à-vis the proposed policy prescription of uniform wholesale pricing to retailers. We also examine the issue of divorcement and the “rockets and feathers” phenomenon. The former is the legal restriction that refiners and retailers cannot be vertically integrated, and the latter is the perception that retail gasoline prices rise faster than they fall in response to random walk movements in the world price for oil.