Price dispersion with multi-product firms and vertical differentiation

Seongeun Kim

Applied Economics Letters, 2019, vol. 26, issue 20, 1724-1728

Abstract: Empirical evidence from the gasoline market suggests that prices and markups for regular gasoline are higher in stations offering both premium and regular compared to stations without premium. Also, the difference is larger in affluent areas. This implies that consumers pay higher prices for the same low-quality product when they visit stores offering both high- and low-quality products in areas that are populated with more high-income consumers.

Date: 2019
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DOI: 10.1080/13504851.2019.1593928

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