American Economic Review Vol. 102 No. 5 2012
Spatial Differentiation and Vertical Mergers in Retail Markets for Gasoline
Abstract
This paper studies an empirical model of spatial competition applied to gasoline markets. The main feature is to specify commuting paths as the “locations'' of consumers in a Hotelling-style model. As a result, spatial differentiation depends in an intuitive way on the structure of the road network and the direction of traffic flows. The model is estimated using panel data on the Quebec City gasoline market and used to evaluate the consequences of a recent vertical merger. Difference-in-difference and counterfactual simulation methods are compared, and the results, to a large extent, validate the assumptions of the demand model.
- DOI
- 10.1257/aer.102.5.2147
- Volume
- 102
- Issue
- 5
- Pages
- 2147-2182
- Language
- en
- Sources
- crossref openalex bibtex:phds-export.bib