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Price discrimination and free-entry markets: the case of gasoline

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  • Wilson Mixon, J.
  • Uri, Noel D.

Abstract

S. Borenstein has demonstrated the compatibility of monopolistic competition and price discrimination. This paper applies this model to an industry that is often cited as the epitome of monopolistic competition, namely retail gasoline. It derives a hypothesis regarding the price spread between unleaded and leaded gasoline from a monopolistic competition model and tests that hypothesis. The empirical estimates are consistent with the model's predictions.

Suggested Citation

  • Wilson Mixon, J. & Uri, Noel D., 1987. "Price discrimination and free-entry markets: the case of gasoline," Applied Energy, Elsevier, vol. 26(1), pages 1-7.
    • Handle: RePEc:eee:appene:v:26:y:1987:i:1:p:1-7
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    File URL: http://www.sciencedirect.com/science/article/pii/0306-2619(87)90005-5
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    Cited by:

    1. Chang, Kai & Zhang, Chao, 2018. "Asymmetric dependence structure between emissions allowances and wholesale diesel/gasoline prices in emerging China's emissions trading scheme pilots," Energy, Elsevier, vol. 164(C), pages 124-136.

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