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Testing Parallel Pricing Behavior in the Polish Wholesale Fuel Market: an ARDL – Bound Testing Approach

Dynamic Econometric Models

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Title Testing Parallel Pricing Behavior in the Polish Wholesale Fuel Market: an ARDL – Bound Testing Approach
 
Creator Bejger, Sylwester; Nicolaus Copernicus University
 
Subject wholesale fuel market; parallel pricing; cointegration

 
Description In this study, we investigated whether the observed series of fuel prices can be compatible with a specific theoretical model of strategic player interaction. Our primary interest is in determining whether a parallel pricing policy, implied by a theoretical model of strategic interactions, can be an industry-observed pricing mechanism. Therefore, we first calculated various descriptive statistics of the price series to discover any common patterns of individual series. Next, we determined whether parallel co-movement of the price levels exist using an ARDL – bound testing approach. This study finds that if we restricted our research to the described pricing mechanism (IPP pricing based on previous day fundamentals), the players will have chosen the levels of price in a parallel mode; this excludes 2007, when LOTOS appeared to be the price leader.
 
Publisher Nicolaus Copernicus University
 
Contributor
 
Date 2016-02-18
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion


 
Format application/pdf
 
Identifier http://apcz.umk.pl/czasopisma/index.php/DEM/article/view/DEM.2015.007
10.12775/DEM.2015.007
 
Source Dynamic Econometric Models; Vol 15 (2015); 111-128
Dynamic Econometric Models; Vol 15 (2015); 111-128
2450-7067
1234-3862
 
Language eng
 
Relation http://apcz.umk.pl/czasopisma/index.php/DEM/article/view/DEM.2015.007/8949
 
Rights Copyright (c) 2016 Dynamic Econometric Models