Might as well jump! Coordinating on more frequent price hikes in a retail gasoline market

This paper studies price leadership and coordination in the retail gasoline market.Its main contribution is to show how large retail chains use price leadership toboth agree on and sustain a new margin-enhancing equilibrium. A unique datasetspanning 14 years with exact timing of price changes for almost all Norwegian gasolinestations is employed to study a transition led by the largest chain to regularMonday price jumps, and later a transition led by the second largest chain to additionalThursday price jumps. By combining the price data with volume and costdata, I estimate that the transition to more frequent price jumps has a substantialpositive effect on volume-weighted retail margins