Price Transparency and Tacit Collusion in the Gasoline Industry in Mexico
DOI:
https://doi.org/10.24275/uam/azc/dcsh/ae/2020v35n90/MorgantiKeywords:
Transparency, Tacit Collusion, Competition Policy, CartelsAbstract
Despite the introduction of new retailers in the Mexican gasoline industry in 2018, retail margins remain high regardless of the low international oil prices. This article introduces a theoretical model in which price transparency reinforces tacit collusion among retailers rather than favoring a competitive environment. Counterintuitively, the government should strive to implement price Obfuscation rather than Transparency, in order to promote socially beneficial price wars.
JEL Classification: L13; L40.
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References
Abreu, D. (1983). Repeated Games with Discounting: A General Theory and an Application to Oligopoly, Ph.D. Thesis, Department of Economics, Princeton University
Abreu, D. (1988). On the Theory of Infinitely Repeated Games. Econometrica, vol. 56, no. 2, pp. 383-396, https://doi.org/10.2307/1911077
Abreu, D., D. Pearce and E. Stacchetti, (1990). Toward a Theory of Discounted Repeated Games with Imperfect Monitoring. Econometrica, vol 58, no. 5, pp. 1041-1063, https://doi.org/10.2307/2938299
Albæk, S., P. Møllgaard, and P. B. Overgaard, (1997). Government-Assisted Oligopoly Coordination? A Concrete Case. Journal of Industrial Economics, vol. 45, no. 4, pp. 429-44, https://doi.org/10.1111/1467-6451.00057
Diamond, P. (1971). A Model of Price Adjustment. Journal of Economic Theory, vol. 3, no. 2, pp. 156-168, https://doi.org/10.1016/0022-0531(71)90013-5
Green, E. and R. Porter (1984). Non-cooperative Collusion under Imperfect Price Information. Econometrica, vol. 52, no. 1, pp. 87-100,https://doi.org/10.2307/1911462
COFECE (2019). Transición hacia Mercados Competidos de Energía: Gasolina y Diésel. Cuadernos de Promoción de la Competencia, Ciudad de México: Comisión Federal de Competencia Económica.
Stigler, G. (1964). A Theory of Oligopoly. Journal of Political Economy, vol. 72, no. 1, pp. 44-61. https://doi.org/10.1086/258853
Tirole, J. (1988). The Theory of Industrial Organization, MIT Press Books, Cambridge, M.A.: The MIT Press.
OECD, (2001), OECD Policy Roundtable (2001), Price Transparency, OECD document DAFFE/CLP 2001(22), http://www.oecd.org/dataoecd/52/63/2535975.pdf
Abreu, D. (1988). On the Theory of Infinitely Repeated Games. Econometrica, vol. 56, no. 2, pp. 383-396, https://doi.org/10.2307/1911077
Abreu, D., D. Pearce and E. Stacchetti, (1990). Toward a Theory of Discounted Repeated Games with Imperfect Monitoring. Econometrica, vol 58, no. 5, pp. 1041-1063, https://doi.org/10.2307/2938299
Albæk, S., P. Møllgaard, and P. B. Overgaard, (1997). Government-Assisted Oligopoly Coordination? A Concrete Case. Journal of Industrial Economics, vol. 45, no. 4, pp. 429-44, https://doi.org/10.1111/1467-6451.00057
Diamond, P. (1971). A Model of Price Adjustment. Journal of Economic Theory, vol. 3, no. 2, pp. 156-168, https://doi.org/10.1016/0022-0531(71)90013-5
Green, E. and R. Porter (1984). Non-cooperative Collusion under Imperfect Price Information. Econometrica, vol. 52, no. 1, pp. 87-100,https://doi.org/10.2307/1911462
COFECE (2019). Transición hacia Mercados Competidos de Energía: Gasolina y Diésel. Cuadernos de Promoción de la Competencia, Ciudad de México: Comisión Federal de Competencia Económica.
Stigler, G. (1964). A Theory of Oligopoly. Journal of Political Economy, vol. 72, no. 1, pp. 44-61. https://doi.org/10.1086/258853
Tirole, J. (1988). The Theory of Industrial Organization, MIT Press Books, Cambridge, M.A.: The MIT Press.
OECD, (2001), OECD Policy Roundtable (2001), Price Transparency, OECD document DAFFE/CLP 2001(22), http://www.oecd.org/dataoecd/52/63/2535975.pdf
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Published
2020-09-04
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How to Cite
Price Transparency and Tacit Collusion in the Gasoline Industry in Mexico. (2020). Análisis Económico, 35(90), 221-228. https://doi.org/10.24275/uam/azc/dcsh/ae/2020v35n90/Morganti
