Geographic Competition in the Retail Gasoline Market: Who are a Gas Station’s Competitors?

摘要: Volatility in gasoline prices often leads the public to question thecompetitiveness of markets US. However, retail market hasreceived less examination literature part because exhibitscharacteristics consistent with a competitive market. The consistsof numerous stations selling homogeneous product price conscious consumers.Competitive pressures are heightened further by prominent posting loweringconsumers’ cost obtaining information. assumption markethowever ignores spatial differentiation that results when consumers incur travel costs.By giving individual firms pricing power, creates potential forcompeting engage strategic interaction their decision. This studyuses econometrics examine extent which this differentiationresults decision gas stations. Resultsindicate neighboring whensetting and specification tests suggest each station considers behaviorof its fifteen nearest competitors. (R3, L1)