Network Centrality and Market Prices: Empirical Evidence

Matthias Firgo, Dieter Pennerstorfer, Christoph Weiss

Publication: Scientific journalJournal articlepeer-review

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We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station located most closely to the market center – defined as the 1-median location – exerts the strongest effect on pricing decisions of other stations. We conclude that centrality influences firms’ pricing behavior and further find that the importance of centrality increases with market size.
Original languageEnglish
Pages (from-to)79 - 83
JournalEconomics Letters
Publication statusPublished - 2016

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502013 Industrial economics
  • 507016 Regional economy

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