Dynamic Analysis of Edgeworth Price Cycles

Existing studies have found retail gasoline prices move up and down, following a mysteriously clear cyclical pattern. The same pattern has been documented in many countries, including Australia, Canada, Germany, and the United States. People are wondering if gas stations are secretly conspiring to increase profits by such pricing strategies.

In response to this public concern over potentially anti-competitive practices, some countries (e.g., Australia, Austria, Germany, and Italy) have made the data on retail gasoline prices publicly available. Their hope is that researchers can scrutinize such “big data” and find something useful for public policy.

So why don’t we, Yale economists, save the world? Given these motivations, this research project seeks to (i) document stylized facts about such price cycles, (ii) find empirical regularities in relation to their potential determinants, and (iii) provide theoretical and quantitative explanations about the data patterns.

To tackle this problem, I’m teaming up with Swiss computer scientists who are experts on high-performance computing and machine learning (as well as astrophysics and macroeconomics), so a lot of your work will be performed on a remote-computing platform in Lausanne, Switzerland.