Assad, Stephanie;
Clark, Robert;
Ershov, Daniel;
Xu, Lei;
(2024)
Algorithmic Pricing and Competition: Empirical Evidence from the German Retail Gasoline Market.
Journal of Political Economy
10.1086/726906.
(In press).
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Abstract
We provide the first empirical analysis of the relationship between algorithmic pricing (AP) and competition by studying the impact of adoption in Germany’s retail gasoline market, where software became widely available in 2017. Because adoption dates are unknown, we identify adopting stations by testing for structural breaks in AP markers, finding most breaks to be around the time of widespread AP introduction. Because station adoption is endogenous, we instrument using headquarter adoption. Adoption increases margins but only for nonmonopoly stations. In duopoly and triopoly markets, margins increase only if all stations adopt, suggesting that AP has a significant effect on competition.
| Type: | Article |
|---|---|
| Title: | Algorithmic Pricing and Competition: Empirical Evidence from the German Retail Gasoline Market |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1086/726906 |
| Publisher version: | https://doi.org/10.1086/726906 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Social Sciences, Economics, Business & Economics, DISCRIMINATION, COLLUSION, PRICES, OLIGOPOLY, TESTS |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10187765 |
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