Gasoline prices in Indianapolis, Indiana are characterized by significant increases followed by \ngradual decreases over time. This paper illustrates and extends a stylized graphical model of \nintertemporal price discrimination. Supplemented with institutional details and empirical \nevidence, this model explains the Edgeworth price cycle mechanism in the Indianapolis retail \ngasoline oligopoly. With effective price leadership, stations can extract consumer surplus from \ncustomer groups while increasing their variable profits. Policy implications are discussed \nshowing the welfare gains that can be obtained by making consumers aware of these cycles, \nallowing them the opportunity to re-capture some of their surplus.
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