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Price Dispersion And Competition With Differentiated Sellers

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  • MATTHEW LEWIS

Abstract

I measure price dispersion among differentiated retail gasoline sellers and study the relationship between dispersion and the local competitive environment. Significant price dispersion exists even after controlling for differences in station characteristics, and price differences between sellers change frequently. The extent of price dispersion is related to the density of local competition, but this relationship varies significantly depending on the type of seller and the composition of its competitors. These findings are consistent with interactions between seller and consumer heterogeneity that are not well understood in the existing price dispersion literature.

Suggested Citation

  • Matthew Lewis, 2008. "Price Dispersion And Competition With Differentiated Sellers," Journal of Industrial Economics, Wiley Blackwell, vol. 56(3), pages 654-678, September.
    • Handle: RePEc:bla:jindec:v:56:y:2008:i:3:p:654-678
    DOI: 10.1111/j.1467-6451.2008.00348.x
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    References listed on IDEAS

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