Price Competition and Market Segmentation in Retail Gasoline: New Evidence from South Korea

Taehwan Kim ()
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Taehwan Kim: University of Missouri

Review of Industrial Organization, 2018, vol. 53, issue 3, No 6, 507-534

Abstract: Abstract I examine price dispersion in retail gasoline and focus on differentiation along the service dimension: full service versus self service. Consistent with more intensive search by self-service customers, I find that price dispersion always decreases with the number of nearby self-service stations, but does not decrease with the number of nearby full-service stations. When I segment the market by brand, I observe that the estimates are sensitive to how brands are separated into different types. These findings show that the market is more clearly segmented by service level than by brand type and also highlight the importance of product differentiation when modeling price dispersion.

Keywords: Consumer search; Differentiated sellers; Market segmentation; Price dispersion; Retail gasoline; Self service (search for similar items in EconPapers)
JEL-codes: D22 L11 L81 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11151-018-9626-z

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