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| Author: | Karamychev, V. Reeven, P. van |
| Title: | Why fuel surcharges may be anticompetitive |
| Journal: | Journal of Transport Economics and Policy
2009 : MAY, VOL. 43:2 p. 141-155 |
| Index terms: | fuel transport costs pricing |
| Language: | eng |
| Abstract: | With the rising oil prices, fuel surcharges have become a common and broadly used practice in the transportation industry. Firms ask consumers to pay these surcharges additive to the base price. Assuming that (i) fuel prices have random fluctuation, (ii) fuel prices affect firms' costs differently, and (iii) firms pass on their fuel costs changes to consumers, we demonstrate that the practice of fuel surcharging raises firms' profits, and constitutes an anticompetitive behaviour. |
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