Theoretical Model of Pricing Behavior on the Polish Wholesale Fuel Market
Abstract
In this paper, we constructed a theoretical model of strategic pricing behavior of the players in a Polish wholesale fuel market. This model is consistent with the characteristics of the industry, the wholesale market, and the players. The model is based on the standard methodology of repeated games with a built-in adjustment to a focal price, which resembles the Import Parity Pricing (IPP) mechanism. From the equilibrium of the game, we conclude that the focal price policy implies a parallel pricing strategic behavior on the market.
Language: English
Page range: 286 - 300
Submitted on: Nov 3, 2015
Accepted on: Jun 27, 2016
Published on: Dec 30, 2016
Published by: Sciendo
In partnership with: Paradigm Publishing Services
Publication frequency: 2 times per year
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© 2016 Sylwester Bejger, published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.