|29th IBIMA Conference
3 - 4 May 2017
Assessing the Economic Effects of Cartels: An Empirical Analysis of a Fuel Market Cartel
Iuliana Tania Zlatcu,
paper aims to test the effectiveness of a screen designed to detect
cartels based on the price level and volatility by applying it on an
existing cartel case in the retail fuel market, investigated by the
competition authority in Bulgaria. Using GARCH model, the fuel prices
volatility was estimated on the Bulgarian market and on other four
geographical markets in Central and Eastern Europe, namely Romania,
Hungary, Czech Republic and Poland.
The results of the research reveal that, between 2013 and 2015, the average prices practiced in Bulgaria for gasoline and diesel were approx. 10% higher than those practiced on the other four geographic markets considered in the analysis, but also approx. 10% higher than the EU average price of these fuels. Likewise, over the same period, it has been found persistent low price volatility in Bulgaria. The results obtained are consistent with those obtained by the Bulgarian competition authority during the investigation conducted and which, at the end of 2016, has led to accusing the six companies investigated for a price fixing cartel.