Market concentration and product variety under spatial competition : evidence from retail gasoline

We show that for a spatially differentiated economy reduced product variety is the likely outcome of mergers except in cases where exit costs in relation to (outlet-specific) fixed costs are high. Our empirical analysis of the Austrian retail gasoline market confirms that increases in concentration reduce product variety. Ignoring this product variety effect is likely to lead to an underestimate of market power in structural merger analysis.

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Year of publication:	2004
Authors:	Goetz, Georg ; Gugler, Klaus
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	Produktdifferenzierung \| Räumlicher Wettbewerb \| Fusion \| Wirtschaftskonzentration \| Tankstelle \| Theorie \| Österreich \| spatial product differentiation \| retail gasoline \| mergers \| concentration

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Series:	CESifo Working Paper ; 1289
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	856943665 [GVK] hdl:10419/18927 [Handle]
Classification:	L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L90 - Industry Studies: Transportation and Utilities. General ; L13 - Oligopoly and Other Imperfect Markets
Source:	EconStor

Persistent link: https://www.econbiz.de/10010261269