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

Georg Götz () and Klaus Gugler ()

Journal of Industry, Competition and Trade, 2006, vol. 6, issue 3, pages 225-234

Abstract: 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. Copyright Springer Science + Business Media, LLC 2006

Keywords: spatial product differentiation; retail gasoline; mergers; concentration; L11; L13; L90 (search for similar items in EconPapers)
Date: 2006
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Working Paper: Market Concentration and Product Variety under Spatial Competition: Evidence from Retail Gasoline (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:kap:jincot:v:6:y:2006:i:3:p:225-234

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