Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, January 12, 2021

Coordinate to obfuscate? The role of prior announcements of recommended prices

Coordinate to obfuscate? The role of prior announcements of recommended prices

By:

Foros, Øystein (Dept. of Business and Management Science, Norwegian School of Economics); Nguyen-Ones, Mai (Dept. of Business and Management Science, Norwegian School of Economics)

Abstract:

Firms may want to coordinate industry-wide price jumps that are predictable for rivals, however, unpredictable for consumers. We show how such coordination is carried out in Norwegian gasoline retailing. Overnight, the market leader initiated an equilibrium transition from regular to non-regular price jumps. Prior announcements of a non-transaction price variable, recommended prices, are used to coordinate the timing and the level of industry-wide price jumps.

URL:

http://d.repec.org/n?u=RePEc:hhs:nhhfms:2020_014&r=com

https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/coordinate-to-obfuscate-the-role-of-prior-announcements-of-recommended-prices.html

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