Product Differentiation and Market Power in the California Gasoline Market

Download or read book Product Differentiation and Market Power in the California Gasoline Market written by German Coloma and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper applies a model of market power measurement under product differentiation to the case of the gasoline market in California, using data for the period 1983-1989. Our results show that there is a considerable degree of product differentiation among major brands. This allows firms to exercise local market power over their own specific products, but there are also signals of an important degree of global market power. However, none of the four pure market structures analyzed (price taking, monopolistic competition, Cournot oligopoly and collusion) seems able to explain by itself the behavior of the whole market.