Optimal deviations from marginal pricing in the oil products' market

Michel Strawczynski

doi:10.1016/0140-9883(90)90036-F

Optimal deviations from marginal pricing in the oil products' market

Michel Strawczynski^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

Deviating from marginal cost is a common practice in oil products pricing. Israeli pricing sets deviations according to the price relationships of an exogenous selected market. In this article we compare this solution with the solution obtained from a maximizer model that takes into account efficiency and income distribution considerations. Through welfare index calculations and comparative statics exercises we show that welfare can be affected by exogenous developments from the point of view of the local market.

Original language	English
Pages (from-to)	232-236
Number of pages	5
Journal	Energy Economics
Volume	12
Issue number	3
DOIs	https://doi.org/10.1016/0140-9883(90)90036-F
State	Published - Jul 1990

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 10 Reduced Inequalities

Keywords

Efficiency and income distribution
Marginal pricing
Optimal deviations

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10.1016/0140-9883(90)90036-F

Cite this

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abstract = "Deviating from marginal cost is a common practice in oil products pricing. Israeli pricing sets deviations according to the price relationships of an exogenous selected market. In this article we compare this solution with the solution obtained from a maximizer model that takes into account efficiency and income distribution considerations. Through welfare index calculations and comparative statics exercises we show that welfare can be affected by exogenous developments from the point of view of the local market.",

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Optimal deviations from marginal pricing in the oil products' market

Abstract

UN SDGs

Keywords

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