Market Concentration and Product Variety under Spatial Competition: Evidence from Retail Gasoline

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...

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Bibliographic Details
Published in:Journal of industry, competition and trade Vol. 6; no. 3-4; pp. 225 - 234
Main Authors: Götz, Georg, Gugler, Klaus
Format: Journal Article
Language:English
Published: New York Springer Nature B.V 01-12-2006
Subjects:
Acquisitions & mergers
Antitrust
Competition
Consumers
Costs
Economics
Evidence
Fixed costs
Lobbyists
Market
Market shares
Petrol
Prices
Product differentiation
Products
Profits
Retailing industry
Service stations
Statistical analysis
Studies
Austria
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Summary: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 under estimate of market power in structural merger analysis. [PUBLICATION ABSTRACT]
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:1566-1679
1573-7012
DOI:10.1007/s10842-006-0025-z