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| Author: | Slade, M. E. |
| Title: | Vancouver's gasoline-price wars: an empirical exercise in uncovering supergame strategies |
| Journal: | Review of Economic Studies
1992 : APR, VOL. 59(2):199, p.257-576 |
| Index terms: | PRICES WAR STRATEGY GAME THEORY FUEL SUPPLIES DEMAND OLIGOPOLY |
| Language: | eng |
| Abstract: | A unique data set is used to determine which dynamic model of tacit collusion best describes behaviour in a region of the Vancouver British Columbia retail-gasoline market. Players are service-station managers who compete daily. Firms choose price in each period using strategies that depend on prices chosen in the previous period. Periodically, unanticipated demand shocks precipitate price wars. The firms in the market must determine the new demand conditions and adjust their strategies. Repeated-game oligopoly models can be assessed in terms of their power to explain firm behaviour in this market. |
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