IDEAS home Printed from https://ideas.repec.org/p/zbw/dicedp/220.html
   My bibliography  Save this paper

The impact of the market transparency unit for fuels on gasoline prices in Germany

Author

Listed:
  • Dewenter, Ralf
  • Heimeshoff, Ulrich
  • Lüth, Hendrik

Abstract

Increasing horizontal as well as vertical transparency in oligopolistic markets can be advantageous for consumers, due to reduced search costs. However, market transparency can also affect incentives to deviate from collusive agreements and the punishment by rival firms in the market. Using a panel of 27 European countries, we analyze the impact of increased market transparency via the introduction of a market transparency unit for fuels in Germany. Applying a difference-in-differences approach, we find evidence that both gasoline and diesel prices have increased. While consumers may be better off using a retail price app for fuels, gas stations are also able to compare prices at almost no cost.

Suggested Citation

  • Dewenter, Ralf & Heimeshoff, Ulrich & Lüth, Hendrik, 2016. "The impact of the market transparency unit for fuels on gasoline prices in Germany," DICE Discussion Papers 220, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:220
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/140879/1/859464369.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stiglitz, Joseph E., 1989. "Imperfect information in the product market," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 13, pages 769-847, Elsevier.
    2. Ralf Dewenter & Ulrich Heimeshoff & Hendrik Lüth, 2017. "Less Pain at the Pump? The Effects of Regulatory Interventions in Retail Gasoline Markets," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot GmbH, Berlin, vol. 63(3), pages 259-274.
    3. Kai-Uwe Kühn, 2001. "Fighting collusion by regulating communication between firms," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 16(32), pages 168-204.
    4. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
    5. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    7. Xavier Vives, 2002. "Private Information, Strategic Behavior, and Efficiency in Cournot Markets," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 361-376, Autumn.
    8. Xavier Vives, 1990. "Trade Association Disclosure Rules, Incentives to Share Information, and Welfare," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 409-430, Autumn.
    9. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    10. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chiara Drolsbach & Maximilian Maurice Gail & Phil-Adrian Klotz, 2022. "Pass-through of Temporary Fuel Tax Reductions: Evidence from Europe," MAGKS Papers on Economics 202239, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Wein, Thomas, 2021. "Why abandoning the paradise? Stations incentives to reduce gasoline prices at first," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242362, Verein für Socialpolitik / German Economic Association.
    3. Drolsbach, Chiara Patricia & Gail, Maximilian Maurice & Klotz, Phil-Adrian, 2023. "Pass-through of Temporary Fuel Tax Reductions: Evidence from Europe," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277655, Verein für Socialpolitik / German Economic Association.
    4. José Manuel Ordóñez-de-Haro & Jordi Perdiguero & Juan-Luis Jiménez, 2020. "Fuel prices at petrol stations in touristic cities," Tourism Economics, , vol. 26(1), pages 45-69, February.
    5. Haucap, Justus & Heimeshoff, Ulrich & Siekmann, Manuel, 2016. "Selling gasoline as a by-product: The impact of market structure on local prices," DICE Discussion Papers 240, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Horvath, Marco, 2019. "Germany's market transparency unit for fuels: Fostering collusion or competition?," Ruhr Economic Papers 836, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Thomas Wein, 2021. "Why Abandon the Paradise? Stations’ Incentives to Reduce Gasoline Prices at First," Journal of Industry, Competition and Trade, Springer, vol. 21(4), pages 465-504, December.
    8. Jens‐Peter Loy & Dieter Pennerstorfer & Daniela Rroshi & Christoph Weiss & Biliana Yontcheva, 2022. "Consumer Information and Price Transmission: Empirical Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 70(3), pages 631-683, September.
    9. Christoph Kleineberg, 2020. "Market definition of the german retail gasoline industry on highways and those in the immediate vicinity," Working Paper Series in Economics 389, University of Lüneburg, Institute of Economics.
    10. Céline Bonnet & Jan Philip Schain, 2020. "An Empirical Analysis Of Mergers: Efficiency Gains And Impact On Consumer Prices," Journal of Competition Law and Economics, Oxford University Press, vol. 16(1), pages 1-35.
    11. Drolsbach, Chiara Patricia & Gail, Maximilian Maurice & Klotz, Phil-Adrian, 2023. "Pass-through of temporary fuel tax reductions: Evidence from Europe," Energy Policy, Elsevier, vol. 183(C).
    12. Dewenter Ralf & Schwalbe Ulrich, 2016. "Preisgarantien im Kraftstoffmarkt," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 17(3), pages 276-288, September.
    13. Institute of Economics, 2020. "Institut für Volkswirtschaftslehre Forschungsbericht 2019," Working Paper Series in Economics 388, University of Lüneburg, Institute of Economics.
    14. Dieter Pennerstorfer & Philipp Schmidt‐Dengler & Nicolas Schutz & Christoph Weiss & Biliana Yontcheva, 2020. "Information And Price Dispersion: Theory And Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 871-899, May.
    15. Eibelshäuser, Steffen & Wilhelm, Sascha, 2017. "Markets Take Breaks: Dynamic Price Competition with Opening Hours," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168247, Verein für Socialpolitik / German Economic Association.
    16. Martin, Simon, 2020. "Market transparency and consumer search - Evidence from the German retail gasoline market," DICE Discussion Papers 350, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bergman, Mats A. & Johansson, Per & Lundberg, Sofia & Spagnolo, Giancarlo, 2016. "Privatization and quality: Evidence from elderly care in Sweden," Journal of Health Economics, Elsevier, vol. 49(C), pages 109-119.
    2. Manthos D. Delis & Sotirios Kokas & Steven Ongena, 2016. "Foreign Ownership and Market Power in Banking: Evidence from a World Sample," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(2-3), pages 449-483, March.
    3. Boone, J., 2004. "Balance of Power," Other publications TiSEM d3f8cd4b-eaf0-4c1c-aed4-5, Tilburg University, School of Economics and Management.
    4. Boone, Jan, 2004. "Balance of Power," CEPR Discussion Papers 4733, C.E.P.R. Discussion Papers.
    5. Butler, Jeffrey V. & Carbone, Enrica & Conzo, Pierluigi & Spagnolo, Giancarlo, 2020. "Past performance and entry in procurement: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 179-195.
    6. Andersson, Fredrik & Skogh, Goran, 2003. "Quality, self-regulation, and competition: the case of insurance," Insurance: Mathematics and Economics, Elsevier, vol. 32(2), pages 267-280, April.
    7. Brandon Vick, 2017. "Measuring links between labor monopsony and the gender pay gap in Brazil," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-28, December.
    8. Stole, Lars A., 2007. "Price Discrimination and Competition," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 34, pages 2221-2299, Elsevier.
    9. Imke Reimers & Claire (Chunying) Xie, 2019. "Do Coupons Expand or Cannibalize Revenue? Evidence from an e-Market," Management Science, INFORMS, vol. 65(1), pages 286-300, January.
    10. Robert Clark & Ignatius Horstmann & Jean-François Houde, 2021. "Hub and Spoke Cartels: Theory and Evidence from the Grocery Industry," NBER Working Papers 29253, National Bureau of Economic Research, Inc.
    11. Maria Guadalupe, 2007. "Product Market Competition, Returns to Skill, and Wage Inequality," Journal of Labor Economics, University of Chicago Press, vol. 25(3), pages 439-474.
    12. Kifmann, Mathias, 1997. "To commit or not to commit: A health insurance monopoly with variable quality and uncertain types of individuals," Discussion Papers, Series I 288, University of Konstanz, Department of Economics.
    13. Lippert, Christian, 2005. "Is Certification a Promising Way to Ensure Sustainable Resource Use? An Analysis Based on the Concept of 'Self-Enforcing Contracts'," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24563, European Association of Agricultural Economists.
    14. Xavier Giroud & Holger M. Mueller, 2009. "Does Corporate Governance Matter in Competitive Industries?," NBER Working Papers 14877, National Bureau of Economic Research, Inc.
    15. Boone, Jan, 2002. "'Be Nice, Unless it Pays to Fight': A New Theory of Price Determination with Implications for Competition Policy," CEPR Discussion Papers 3342, C.E.P.R. Discussion Papers.
    16. Johannes Hörner, 2002. "Reputation and Competition," American Economic Review, American Economic Association, vol. 92(3), pages 644-663, June.
    17. Bhattacharyya, Aditi & Kutlu, Levent & Sickles, Robin C., 2018. "Pricing Inputs and Outputs: Market prices versus shadow prices, market power, and welfare analysis," Working Papers 18-009, Rice University, Department of Economics.
    18. Stiglitz, Joseph E., 2017. "Monopolistic competition, the Dixit–Stiglitz model, and economic analysis," Research in Economics, Elsevier, vol. 71(4), pages 798-802.
    19. Vilma Todri & Anindya Ghose & Param Vir Singh, 2020. "Trade-Offs in Online Advertising: Advertising Effectiveness and Annoyance Dynamics Across the Purchase Funnel," Information Systems Research, INFORMS, vol. 31(1), pages 102-125, March.
    20. Rajeev K. Goel & Michael A. Nelson, 2021. "How do firms use innovations to hedge against economic and political uncertainty? Evidence from a large sample of nations," The Journal of Technology Transfer, Springer, vol. 46(2), pages 407-430, April.

    More about this item

    Keywords

    market transparency unit; regulation; fuel prices; difference-in-differences;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:dicedp:220. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/diduede.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.