Details

Autor(en) / Beteiligte

• Lewis, Matthew S.

Titel

Odd Prices at Retail Gasoline Stations: Focal Point Pricing and Tacit Collusion

Ist Teil von

• Journal of economics & management strategy, 2015-09, Vol.24 (3), p.664-685

Ort / Verlag

Cambridge: Blackwell Publishing Ltd

Erscheinungsjahr

2015

Quelle

Wiley Online Library Journals Frontfile Complete

Beschreibungen/Notizen

• This study empirically investigates the theory that odd‐numbered pricing points can be used as focal points to facilitate tacit collusion. Like other retailers, gasoline stations in the United States disproportionately sell at prices ending in odd digits. I show that station prices are higher and change less frequently in locations using more odd prices (particularly those ending in 5 or 9), even after controlling for other market characteristics. The evidence suggests that the use of pricing points can be an effective mechanism for tacitly coordinating prices, providing an alternative explanation for the widespread use of odd prices in retail markets.