Market Power and Structure in the Retail Motor Fuel Market

Harry O'Rahilly and Patrick Walsh ()
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Harry O'Rahilly: Department of Economics and School of Politics and International Relations, University College Dublin, Dublin, Ireland

No 202404, Working Papers from Geary Institute, University College Dublin

Abstract: We model the retail motor fuel market in Ireland in a two-stage market entry game, with exogenous sunk costs in stage one, and price competition with horizontal product differentiation in stage two, utilizing Salop (1979). Using GIS tools, we show how driving times, benchmarked against road distance and straight-line measures, alter estimates of the disutility of traveling between rival locations. We estimate a robust and unbiased long-run equilibrium relationship between mark-ups and market structure, identified by driving times between locations to conduct an ex-post evaluation of a merger and divestment remedies in the retail motor fuel market in Ireland.

Keywords: Market Structure, Performance; Spatial Econometrics (search for similar items in EconPapers)
JEL-codes: L10 L38 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2024
New Economics Papers: this item is included in nep-com, nep-ene, nep-gth, nep-ind and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:ucd:wpaper:202404

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