Spatial Clustering and Market Power: Evidence from the Retail Gasoline Market

Christoph Weiss, Dieter Pennerstorfer

Publication: Scientific journalJournal articlepeer-review


We investigate the impact of local market power and spatial clustering on prices in the retail gasoline market. The acquisition of Aral stations from BP in the Austrian gasoline market in 2003 provides a quasi-experiment for identification of the causal effects of changes in spatial clustering on retail prices for a panel of gasoline stations. Our econometric analysis suggests that spatial clustering of gasoline stations reduces the degree of competition between firms and increases equilibrium prices. Merger simulations show that ignoring merger-induced changes in spatial characteristics will lead to a significant bias in the evaluation
of merger effects.
Original languageEnglish
Pages (from-to)661 - 675
JournalRegional Science and Urban Economics
Issue number43
Publication statusPublished - 2013

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502013 Industrial economics

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