Network Centrality and Market Prices: Empirical Evidence

Matthias Firgo; Dieter Pennerstorfer; Christoph Weiss

doi:10.1016/j.econlet.2015.11.032

Network Centrality and Market Prices: Empirical Evidence

Matthias Firgo, Dieter Pennerstorfer, Christoph Weiss

Department of Economics (Weiss)

Publication: Scientific journal › Journal article › peer-review

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Abstract

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 language	English
Pages (from-to)	79 - 83
Journal	Economics Letters
Volume	139
DOIs	https://doi.org/10.1016/j.econlet.2015.11.032
Publication status	Published - 2016

Austrian Classification of Fields of Science and Technology (ÖFOS)

502013 Industrial economics
507016 Regional economy

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10.1016/j.econlet.2015.11.032Licence: Unspecified

Firgo Pennerstorfer Weiss 2016 Economics Letters Network Centrality and Market Prices Accepted ManuscriptAccepted author manuscript, 939 KBLicence: Other

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University Library Catalogue

Price Dispersion in Space: Evidence from Micro-Data on the Austrian Gasoline Market
Weiss, C., Jost, B. & Pennerstorfer, D.
1/09/08 → 31/08/12
Project: Research funding

Cite this

@article{cc860354b45c493188d3227aff5b1fc7,

title = "Network Centrality and Market Prices: Empirical Evidence",

abstract = "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{\textquoteright} pricing behavior and further find that the importance of centrality increases with market size.",

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AU - Pennerstorfer, Dieter

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AB - 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.

U2 - 10.1016/j.econlet.2015.11.032

DO - 10.1016/j.econlet.2015.11.032

M3 - Journal article

SN - 0165-1765

VL - 139

SP - 79

EP - 83

JO - Economics Letters

JF - Economics Letters

ER -

Network Centrality and Market Prices: Empirical Evidence

Abstract

Austrian Classification of Fields of Science and Technology (ÖFOS)

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Price Dispersion in Space: Evidence from Micro-Data on the Austrian Gasoline Market

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