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

Georg Goetz () and Klaus Gugler ()
Authors registered in the RePEc Author Service: Georg Götz ()

No CESifo Working Paper No. 1289, CESifo Working Paper Series from CESifo Group Munich

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.

Keywords: spatial product differentiation; retail gasoline; mergers; concentration (search for similar items in EconPapers)
JEL-codes: L11 L13 L90 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-ure
Date: 2004
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Journal Article: Market Concentration and Product Variety under Spatial Competition: Evidence from Retail Gasoline (2006)
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