Cover: Market Behavior Under Partial Price Controls

Market Behavior Under Partial Price Controls

The Case of the Retail Gasoline Market

Published 1983

by Frank Camm

Download eBook for Free

FormatFile SizeNotes
PDF file 1.8 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

The use of firm-specific controls on the price of gasoline during 1979 and 1980, at both the wholesale and the retail level, dramatically affected the retail market for gasoline. Price could no longer play its usual role in clearing the retail market for gasoline. This report examines the behavior of an otherwise competitive market in the presence of such regulation-induced nonprice phenomena. It also examines the equilibrium levels of price and nonprice components that emerge from such modal choices by all consumers in a market. Section II briefly reviews the relevant price controls in effect in 1979 and 1980. Section III presents a simple model of partial price control whose implications are developed in Sec. IV. Section V examines how such price controls affect economic efficiency. Section VI illustrates how the analysis can be brought to bear on a specific, concrete, policy proposal, the idea of "gourmet gasoline stations." Several appendixes develop the formal mathematical results that underlie arguments developed in the text.

This report is part of the RAND report series. The report was a product of RAND from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.