IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_10566.html
   My bibliography  Save this paper

The Heterogeneous Effects of Entry on Prices

Author

Listed:
  • Kai Fischer
  • Simon Martin
  • Philipp Schmidt-Dengler

Abstract

We study the effect of entry on the price distribution in the German retail gasoline market. Exploiting more than 700 entries over five years in an event study design, we find that entry causes a persistent first-order stochastic shift in the price distribution. Prices at the top of the distribution change moderately only, but prices at the left tail decrease by up to 12% of stations’ gross margins. Consumers with easy access to information on prices gain the most from entry. The reduction in transaction prices is 32-44% stronger for fully informed consumers than for uninformed consumers.

Suggested Citation

  • Kai Fischer & Simon Martin & Philipp Schmidt-Dengler, 2023. "The Heterogeneous Effects of Entry on Prices," CESifo Working Paper Series 10566, CESifo.
    • Handle: RePEc:ces:ceswps:_10566
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp10566.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Henning Hermes & Marina Krauß & Philipp Lergetporer & Frauke Peter & Simon Wiederhold, 2022. "Early Child Care, Maternal Labor Supply, and Gender Equality: A Randomized Controlled Trial," CESifo Working Paper Series 10178, CESifo.
    2. Hermes, Henning & Lergetporer, Philipp & Mierisch, Fabian & Peter, Frauke & Wiederhold, Simon, 2023. "Discrimination on the Child Care Market: A Nationwide Field Experiment," CEPR Discussion Papers 18113, C.E.P.R. Discussion Papers.
    3. Henning Hermes & Marina Krauß & Philipp Lergetporer & Frauke Peter & Simon Wiederhold, 2022. "Early Child Care, Maternal Labor Supply, and Gender Equality: A Randomized Controlled Trial," CESifo Working Paper Series 10178, CESifo.

    More about this item

    Keywords

    entry; information frictions; price distribution; (unconditional) quantile treatment effects;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_10566. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.