Mergers and product variety under spatial competition: Evidence from retail gasoline

Georg Götz, Klaus Gugler

Publication: Scientific journalJournal articlepeer-review

Abstract

We show that for a spatially differentiated economy reduced product
variety is the likely outcome of mergers except in cases where exit costs in relation
to (outlet specific) fixed costs are high. Our empirical analysis of the Austrian retail
gasoline market confirms that increases in concentration reduce product variety.
Ignoring this product variety effect is likely to lead to an underestimate of market
power in structural merger analysis.
Original languageEnglish
Pages (from-to)225 - 234
JournalJournal of Industry, Competition and Trade
Volume6
Issue number3
Publication statusPublished - 1 Dec 2006

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502013 Industrial economics

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