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THE ROCKETS AND FEATHERS HYPOTHESIS: AN APPLICATION TO GASOLINE PRICES IN FIJI

Bacon (1991) labeled asymmetric price adjustments in the oligopoly markets as the rockets and feathers hypothesis where firms increase prices faster than decrease in response to changes in costs and market conditions. In this paper, the authors test this hypothesis for the gasoline market in Fiji and show that there are asymmetric price adjustments. It is found that oil firms in Fiji increase gasoline prices twice faster.
Year of publication:
2006
Authors: Rao, B Bhaskara ; Rao, Gyaneshwar
Published in:
The IUP Journal of Applied Economics. - IUP Publications. - Vol. V.2006, 5, p. 67-71
Publisher: IUP Publications
Type of publication: Article
Source:
Persistent link: https://www.econbiz.de/10005577563
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