2012/08/01 by Jean-François Houde, Jean‐François Houde · 6 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Consumer Market Behavior and Pricing #Economics of Agriculture and Food Markets #Merger and Competition Analysis
paper · doi:10.1257/aer.102.5.2147
This paper studies an empirical model of spatial competition applied to gasoline markets. The main feature is to specify commuting paths as the “locations'' of consumers in a Hotelling-style model. As a result, spatial differentiation depends in an intuitive way on the structure of the road network and the direction of traffic flows. The model is estimated using panel data on the Quebec City gasoline market and used to evaluate the consequences of a recent vertical merger. Difference-in-difference and counterfactual simulation methods are compared, and the results, to a large extent, validate the assumptions of the demand model. (JEL G34, L13, L42, L81, Q41, R41)