Media, Political Pressure, and the Firm: The Case of Petroleum Pricing in the Late 1970s

This paper empirically examines whether major domestic oil companies held down product prices relative to their less visible counterparts during the 1979 oil crisis. We compare company prices on unregulated fuel oil with a measure of political pressure—the level of television coverage of the energy crisis. We find that media coverage influenced home heating oil price ratios, but did not influence residual fuel oil price ratios for the same companies. We argue that this differential pricing pattern is rational in a politically sensitive period.