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Collusive Communication and Pricing Coordination in a Retail Gasoline Market

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Abstract

This paper studies how communication is used by a retail gasoline cartel in Australia to coordinate price increases, a role of communication in collusion not highlighted by Genesove and Mullin (Am Econ Rev 91(3): 379–398, 2001). A unique data set from the trial record allows for quantifying not only the pricing dynamics, but also the communication patterns. Both empirical and narrative evidence suggests the collusive communication and pricing behavior is well captured by the price cycle equilibrium of the Maskin and Tirole (Econometrica 56(3): 571–599, 1988) model.

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Authors and Affiliations

  1. Department of Economics, Northeastern University, Boston, MA, 02115, USA

    Zhongmin Wang

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  1. Zhongmin Wang
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Correspondence to Zhongmin Wang.

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Wang, Z. Collusive Communication and Pricing Coordination in a Retail Gasoline Market. Rev Ind Organ 32, 35–52 (2008). https://doi.org/10.1007/s11151-008-9163-2

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  • DOI: https://doi.org/10.1007/s11151-008-9163-2

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