The Clean Air Act Amendments of 1990 and subsequent state-level environmental regulations specify regional content criteria that gasoline must meet prior to retail sale. Since the early 1990's, the regulations have created fifteen unique blends of gasoline for use in different locations....

Some gasoline markets exhibit remarkable price cycles, where price spikes are followed by a string of small price declines until the next price spike. This pattern is predicted from a model of competition driven by Edgeworth cycles, as described by Maskin and Tirole. We extend the Maskin and...