Quotation Firgo, Matthias, Pennerstorfer, Dieter, Weiss, Christoph. 2012. Centrality and Pricing in Spatially Differentiated Markets: The Case of Gasoline. WIFO Working Paper No. 432.


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Abstract

This paper highlights the importance of "centrality" for pricing. Firms characterised by a more central position in a spatial network are more powerful in terms of having a stronger impact on their competitors' prices and on equilibrium prices. These propositions are derived from a simple theoretical model and tested empirically for the retail gasoline market in Vienna (Austria). We compute different measures of network centrality by using information on the locations of gasoline stations in the road network. Results from a spatial autoregressive model confirm that the strategic interaction in pricing between competitors is significantly related to their degree of centrality.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Centrality and Pricing in Spatially Differentiated Markets: The Case of Gasoline
Title of whole publication WIFO Working Paper No. 432
Year 2012
URL http://www.wifo.ac.at/jart/prj3/wifo/resources/person_dokument/person_dokument.jart?publikationsid=45058&mime_type=application/pdf

Associations

People
Firgo, Matthias (Former researcher)
Pennerstorfer, Dieter (Former researcher)
Weiss, Christoph (Details)
Organization
Institute for Economic Policy and Industrial Economics IN (Details)
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