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

Georg Götz; Klaus Gugler

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

Georg Götz
, Klaus Gugler

Department of Economics (Gugler)

Publication: Scientific journal › Journal article › peer-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 language	English
Pages (from-to)	225 - 234
Journal	Journal of Industry, Competition and Trade
Volume	6
Issue number	3
Publication status	Published - 1 Dec 2006

Austrian Classification of Fields of Science and Technology (ÖFOS)

502013 Industrial economics

Cite this

@article{5db05b413d394073adeee19305e67ba0,

title = "Mergers and product variety under spatial competition: Evidence from retail gasoline",

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.",

author = "Georg G{\"o}tz and Klaus Gugler",

year = "2006",

month = dec,

day = "1",

language = "English",

volume = "6",

pages = "225 -- 234",

journal = "Journal of Industry, Competition and Trade",

issn = "1566-1679",

publisher = "Springer",

number = "3",

}

TY - JOUR

T1 - Mergers and product variety under spatial competition: Evidence from retail gasoline

AU - Götz, Georg

AU - Gugler, Klaus

PY - 2006/12/1

Y1 - 2006/12/1

N2 - 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.

AB - 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.

M3 - Journal article

SN - 1566-1679

VL - 6

SP - 225

EP - 234

JO - Journal of Industry, Competition and Trade

JF - Journal of Industry, Competition and Trade

IS - 3

ER -