Price Competition and Market Segmentation in Retail Gasoline

Download or read book Price Competition and Market Segmentation in Retail Gasoline written by Taehwan Kim and published by . This book was released on 2017 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.