Time as a Strategic Variable: Business Hours in the Gasoline Market

A popular argument in policy discussions on the liberalization of business hours proceeds on the assumption that business hours are strategic complements: if some firms open longer hours, competitors will be forced to extend their opening hours too. We provide first empirical evidence on the impact of competition and the form of strategic interaction in business hours between firms by using detailed information on business hours as well as the location of retail gasoline stations in Austria. Our findings reject the presumption of business hours being strategic complements. Firms tend to have longer opening hours in a more competitive environment.