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Preventing Margin Squeeze: An Unsolvable Puzzle for Competition Policy? The Case of the German Gasoline Market

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  • Thomas Wein

    (Leuphana University Lueneburg, Germany)

Abstract

There is a discrepancy between Europe and the United States on whether margin squeeze is a relevant question for competition law and policy. Beyond this question, it is unclear whether law and the Cartel Office can detect margin squeeze, assuming it is necessary to look into the matter. In Germany, politicians have decided the given rule against margin squeeze should not be abolished, especially because of problems in the gasoline market. This paper discusses a comprehensive microeconomic new explanation on margin squeeze, and discusses some of the problems used to detect margin squeeze in the gasoline market. After comparing theoretical shortcuts, practical challenges and efforts towards enforcement with expected benefits, this paper concludes competition law should ignore the margin squeeze problem.

Suggested Citation

  • Thomas Wein, 2014. "Preventing Margin Squeeze: An Unsolvable Puzzle for Competition Policy? The Case of the German Gasoline Market," Working Paper Series in Economics 309, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:309
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    References listed on IDEAS

    as
    1. Dewenter, Ralf & Heimeshoff, Ulrich, 2012. "Less pain at the pump? The effects of regulatory interventions in retail gasoline markets," DICE Discussion Papers 51, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Wittmann, Nadine, 2014. "Regulating gasoline retail markets: The case of Germany," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-33.
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    7. J. Gregory Sidak, 2008. "Abolishing The Price Squeeze As A Theory Of Antitrust Liability," Journal of Competition Law and Economics, Oxford University Press, vol. 4(2), pages 279-309.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    margin squeeze; gasoline market; market dominance;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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