Who commits fraud? evidence from korean gas stations.

Christian Ahlin, In Kyung Kim, Kyoo il Kim

Research output: Contribution to journalArticlepeer-review

Abstract

In this article, we study under what circumstances a gas station is more likely to commit fuel fraud. Using a new and hitherto unexploited list of fuel fraud detections, we find evidence that stations under less favorable economic conditions – higher operating costs and possibly more competitors – engage in fraudulent activity more often. Chain-affiliated stations commit fraud less often, suggesting an effectiveness in harnessing reputational incentives. Also, fuel fraud tends to cluster among nearby stations, consistent with propagation of illicit activity from one station to others nearby. As for pricing behavior, in general gas stations appear to keep price constant and take higher price-cost margins when selling adulterated fuel, suggesting that consumers are harmed by this kind of fraud.

Original languageEnglish
Article number102719
JournalInternational Journal of Industrial Organization
Volume76
DOIs
Publication statusPublished - May 2021

Keywords

  • Fuel fraud
  • Fuel price
  • Gas station

ASJC Scopus subject areas

  • Industrial relations
  • Aerospace Engineering
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management
  • Industrial and Manufacturing Engineering

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