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| Author: | Noel, M. D. |
| Title: | Edgeworth price cycles: Evidence from the Toronto retail gasoline market |
| Journal: | Journal of Industrial Economics
2007 : MAR, VOL. 55:1, p. 69-92 |
| Index terms: | business cycles consumer price index petroleum stations prices retail pricing |
| Language: | eng |
| Abstract: | This article investigates the strong retail price cycles in the Toronto gasoline market using a station-level, twelve-hourly price dataset. The analysis shows that the price cycles have the same nature than the theoretical Edgeworth Cycles. The cycles are strongly asymmetric, tall, rapid, and synchronous across stations. Drawing from the theory, the author provides and tests predictions about the change in firms' behaviour over the path of cycle. The results of the study support the existence of Edgeworth Cycles, but are inconsistent with competing hypotheses. Implications for policy and welfare are discussed. |
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