Abstract
Using data from the Austrian retail gasoline market we find that a higher
station density reduces average prices. Market (i.e. ownership) concentration does
not significantly affect average price, however is negatively related to the density
of stations. Estimation of the pricing and entry equations as simultaneous equations
does not alter our conclusions, and suggests causality running from station density
to price.We argue that the spatial dimension of markets allows the identification of
market conduct, which is particularly relevant for competition policy.
station density reduces average prices. Market (i.e. ownership) concentration does
not significantly affect average price, however is negatively related to the density
of stations. Estimation of the pricing and entry equations as simultaneous equations
does not alter our conclusions, and suggests causality running from station density
to price.We argue that the spatial dimension of markets allows the identification of
market conduct, which is particularly relevant for competition policy.
| Original language | English |
|---|---|
| Pages (from-to) | 1 - 22 |
| Journal | Empirical Economics |
| Publication status | Published - 1 Aug 2006 |
Austrian Classification of Fields of Science and Technology (ÖFOS)
- 502013 Industrial economics