Market Concentration and Product Variety under Spatial Competition: Evidence from Retail Gasoline
AbstractWe 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. Copyright Springer Science + Business Media, LLC 2006
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Bibliographic InfoArticle provided by Springer in its journal Journal of Industry, Competition and Trade.
Volume (Year): 6 (2006)
Issue (Month): 3 (December)
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Web page: http://springerlink.metapress.com/link.asp?id=105724
spatial product differentiation; retail gasoline; mergers; concentration; L11; L13; L90;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
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