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Theoretical Model of Pricing Behavior on the Polish Wholesale Fuel Market

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  • Bejger Sylwester

    (Nicolas Copernicus University in Toruń, Department of Econometrics and Statistics, Faculty of Economic Sciences and Management, Gagarina 13a, 87-100 Toruń, Poland)

Abstract

In this paper, we constructed a theoretical model of strategic pricing behavior of the players in a Polish wholesale fuel market. This model is consistent with the characteristics of the industry, the wholesale market, and the players. The model is based on the standard methodology of repeated games with a built-in adjustment to a focal price, which resembles the Import Parity Pricing (IPP) mechanism. From the equilibrium of the game, we conclude that the focal price policy implies a parallel pricing strategic behavior on the market.

Suggested Citation

  • Bejger Sylwester, 2016. "Theoretical Model of Pricing Behavior on the Polish Wholesale Fuel Market," Folia Oeconomica Stetinensia, Sciendo, vol. 16(1), pages 286-300, December.
    • Handle: RePEc:vrs:foeste:v:16:y:2016:i:1:p:286-300:n:19
    DOI: 10.1515/foli-2016-0019
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    References listed on IDEAS

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    More about this item

    Keywords

    wholesale fuel market; strategic behavior; focal pricing game; parallel pricing;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions

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