Network centrality and market prices: Empirical evidence

Matthias Firgo, Dieter Pennerstorfer and Christoph Weiss

Economics Letters, 2016, vol. 139, issue C, 79-83

Abstract: We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station located most closely to the market center–defined as the 1-median location–exerts the strongest effect on pricing decisions of other stations. We conclude that centrality influences firms’ pricing behavior and further find that the importance of centrality increases with market size.

Keywords: Network centrality; Spatial competition; Retail markets; Gasoline prices (search for similar items in EconPapers)
JEL-codes: C21 D43 L11 L81 R12 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Network Centrality and Market Prices. An Empirical Note (2015)
Working Paper: Network Centrality and Market Prices: An Empirical Note (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:139:y:2016:i:c:p:79-83

DOI: 10.1016/j.econlet.2015.11.032

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