IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v17y2025i1p41-65.html
   My bibliography  Save this article

The Inner Workings of a Hub-and-Spoke Cartel in the Automotive Fuel Industry

Author

Listed:
  • Daniel Chaves
  • Marco Duarte

Abstract

We study the inner workings of a hub-and-spoke cartel in the Brazilian automotive fuel industry. Based on court documents and detailed price and sales data, we discuss how gas station owners (spokes) operating inside the federal capital received help from fuel distributors (hub) to reduce dispersion of and increase gasoline's retail price. We provide evidence that distributor cartel members benefited by raising wholesale prices while keeping competitors from supplying retail cartel members. We also provide theoretical foundations and empirical evidence for a new mechanism through which hubs help spokes: smoothing cost fluctuations.

Suggested Citation

  • Daniel Chaves & Marco Duarte, 2025. "The Inner Workings of a Hub-and-Spoke Cartel in the Automotive Fuel Industry," American Economic Journal: Microeconomics, American Economic Association, vol. 17(1), pages 41-65, February.
    • Handle: RePEc:aea:aejmic:v:17:y:2025:i:1:p:41-65
    DOI: 10.1257/mic.20210250
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/mic.20210250
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/mic.20210250.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/mic.20210250.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/mic.20210250?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:17:y:2025:i:1:p:41-65. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.