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2020 | 68 | 2 | 115 – 133
Article title

ASYMMETRIC RETAIL GASOLINE AND DIESEL PRICE REACTIONS IN SLOVAK MARKET

Content
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Languages of publication
EN
Abstracts
EN
In the paper we respond a question, if Slovak retail gasoline and diesel prices respond more quickly when crude oil price rises rather than when it decreases. A theoretical explanation of asymmetric retail gasoline and diesel price reactions is addressed by examining the theory of strategic interactions between firm and its consumers. By investigating the traditional approach based on error correction models and vector error correction models, we reject the asymmetric gasoline and diesel price reaction hypotheses in the Slovak market. Considering the theory of strategic interactions between a firm and its consumers, a firm is minimising its adjustment cost function in a linear exponential form. Solving the problem of firm, we derive an econometric specification of a gasoline and diesel price reaction function. Estimating the specification we do not reject asymmetric gasoline and diesel price reaction hypotheses in Slovak market.
Contributors
  • University of Economics, Faculty of Economic Informatics, Dolnozemská cesta 1, 852 35 Bratislava, Slovak Republic
References
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Publication order reference
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YADDA identifier
bwmeta1.element.cejsh-db2f31ad-36bb-427e-b891-e6118cf29257
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