Measuring Market Power in Gasoline Retailing: A Market- or Station Phenomenon?

Mai Nguyen-Ones () and Frode Steen
Additional contact information
Mai Nguyen-Ones: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway

No 2018/4, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

Abstract: Applying detailed consecutive daily micro data at the gasoline station level from Sweden we estimate a structural model to uncover the degree of competition in the gasoline retail market. We find that retailers do exercise market power, but despite the high upstream concentration, the market power is very limited on the downstream level. The degree of market power varies with both the distance to the nearest station and the local density of gasoline stations. A higher level of service tends to raise a seller’s market power; self-service stations have close to no market power. Contractual form and brand identity also seem to matter. We find a clear result: local station characteristics significantly affect the degree of market power. Our results indicate that local differences in station characteristics can more than offset the average market power found for the whole market.

Keywords: Gasoline markets; market power; markup estimation; local market competition (search for similar items in EconPapers)
JEL-codes: D22 L13 L25 L81 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2018-04-19
New Economics Papers: this item is included in nep-com, nep-ene and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/11250/2494980 Full text (application/pdf)

Related works:
Working Paper: Measuring Market Power in Gasoline Retailing: A Market- or Station Phenomenon? (2018)
Working Paper: Measuring Market Power in Gasoline Retailing: A Market- or Station Phenomenon? (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:nhhfms:2018_004

Access Statistics for this paper

More papers in Discussion Papers from Norwegian School of Economics, Department of Business and Management Science NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Stein Fossen ().