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The impact of process innovation on prices: Evidence from automated fuel retailing in The Netherlands

Adriaan Soetevent () and Tadas Bružikas

European Economic Review, 2018, vol. 110, issue C, 181-196

Abstract: In the last decade, many European countries have seen a sharp increase in the number of automated fueling stations. We study the effect of this process innovation on prices at stations that are automated and their competitors using a difference-in-differences matching strategy. Our estimates show that prices at automated stations drop by 1.7 to 3.2% immediately after conversion and stabilize at this lower level. Unlike previous studies, our estimates do not reveal a difference in impact between early and later adopters of automation. Indicative of competitive spillovers, prices at stations within 2 km of an automated station decrease on average with a precisely estimated 0.2%.

Keywords: Technology adoption; Retail gasoline markets; Pricing (search for similar items in EconPapers)
JEL-codes: C22 L13 L81 (search for similar items in EconPapers)
Date: 2018
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