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Price Effects From Retail Gasoline Mergers


  • Michael R. Ward

    () (Department of Economics, University of Texas at Arlington)

  • Nicholas K. Oxedine


This paper explores the price effects of a series of oil mergers, acquisitions, and joint ventures in the decade since 1990 by estimating the price effects of the resulting increases in market concentration. Estimates from two samples, one city level and one state level, of monthly retail and wholesale gasoline prices were conducted. Market power measures were based on the number of branded retail outlets and a calculated Herfindahl-Hirshmann Index (HHI) for each in each geographic market. The mergers are found to have increased retail prices by 0.6% to 1.2% resulting in a transfer from producers to consumers of $1.2 to $2.4 billion per year but a deadweight loss of less than $15 million per year.

Suggested Citation

  • Michael R. Ward & Nicholas K. Oxedine, 2005. "Price Effects From Retail Gasoline Mergers," Working Papers 0503, University of Texas at Arlington, Department of Economics.
  • Handle: RePEc:txa:wpaper:0503

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    References listed on IDEAS

    1. Ying Kong & James R. Seldon, 2004. "Pseudo-Generic Products and Barriers to Entry in Pharmaceutical Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 25(1), pages 71-86, August.
    2. Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 75-90, March.
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    More about this item


    Gasoline; Merger; Pricing; Structure-Conduct-Performance;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection


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