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Why do gas prices vary, or towards understanding the micro-structure of competition

Author

Listed:
  • Philip Bromiley

    (Department of Strategic Management, University of Minnesota, 321 19th Avenue South, Minneapolis, MN 55455, USA)

  • Chris Papenhausen

    (Department of Strategic Management, University of Minnesota, 321 19th Avenue South, Minneapolis, MN 55455, USA)

  • Patricia Borchert

    (Department of Strategic Management, University of Minnesota, 321 19th Avenue South, Minneapolis, MN 55455, USA)

Abstract

Strategic management work on competition considers industry segments or industries for the most part. We argue that real competition occurs at much lower levels of aggregation in many industries: what we term the micro-structure of competition. Micro-structures arise from boundedly rational firms searching imperfectly for business opportunities and boundedly rational consumers searching in a behaviorally determined manner for products and services. This paper lays out the basics of the micro-structural approach to competitive analysis and presents initial propositions from that approach. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Philip Bromiley & Chris Papenhausen & Patricia Borchert, 2002. "Why do gas prices vary, or towards understanding the micro-structure of competition," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(4-5), pages 171-186.
    • Handle: RePEc:wly:mgtdec:v:23:y:2002:i:4-5:p:171-186
    DOI: 10.1002/mde.1060
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    References listed on IDEAS

    as
    1. Dan Schendel, 1991. "Editor's comments on the winter special issue," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 1-3, December.
    2. Shepard, Andrea, 1990. "Pricing Behavior and Vertical Contracts in Retail Markets," American Economic Review, American Economic Association, vol. 80(2), pages 427-431, May.
    3. Thomas H. Brush & Philip Bromiley, 1997. "What does a small corporate effect mean? A variance components simulation of corporate and business effects," Strategic Management Journal, Wiley Blackwell, vol. 18(10), pages 825-835, November.
    4. Assaf Razin & Efraim Sadka, 1995. "Population Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262181606, December.
    5. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69(3), pages 213-213.
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    Cited by:

    1. Erdem Dogukan Yilmaz & Ivana Naumovska & Milan Miric, 2023. "Does imitation increase or decrease demand for an original product? Understanding the opposing effects of discovery and substitution," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 639-671, March.
    2. Daniel Albalate & Jordi Perdiguero, 2012. "“Entry Regulation Asymmetries and Gasoline Competition in a Mixed Motorway Network”," IREA Working Papers 201218, University of Barcelona, Research Institute of Applied Economics, revised Nov 2012.
    3. Jukka Luoma & Sampsa Ruutu & Adelaide Wilcox King & Henrikki Tikkanen, 2017. "Time delays, competitive interdependence, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 506-525, March.
    4. Juan Jiménez & Jordi Perdiguero, 2011. "Does Accessibility Affect Retail Prices and Competition? An Empirical Application," Networks and Spatial Economics, Springer, vol. 11(4), pages 677-699, December.

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