Tuesday, July 21, 2015

Is the German Retail Gas Market Competitive?

Alexander Kihm, German Aerospace Center, Nolan Ritter, Rhine-Westphalia Institute for Economic Research (RWI-Essen), and Colin Vance , Rhine-Westphalia Institute for Economic Research (RWI-Essen) ask Is the German Retail Gas Market Competitive?

ABSTRACT: We explore whether non-competitive pricing prevails in Germany’s retail gasoline market by examining the influence of the crude oil price on the retail gasoline price, focusing specifically on how this influence varies according to the brand and to the degree of competition in the vicinity of the station. Our analysis identifies several factors other than cost – including the absence of nearby competitors and regional market concentration – that play a significant role in mediating the influence of the oil price on the retail gas price, suggesting price setting power among stations.

https://lawprofessors.typepad.com/antitrustprof_blog/2015/07/is-the-german-retail-gas-market-competitive.html

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