A new price test in geographic market definition: An application to German retail gasoline market

Arbeitspapier

Market delineation is a fundamental tool in modern antitrust analysis. However, the definition of relevant markets can be very difficult in practice. This preliminary draft applies a new methodology combining a simple price correlation test with hierarchical clustering -a method known from machine learning- in order to analyze the competitive situation in the German retail gasoline market. Our analysis reveals two remarkable results: At first, there is a uniform pattern across stations of the same brand regarding their maximum daily prices which confirms the claim that prices are partly set centrally. But more importantly, price reactions are also influenced by regional or local market conditions as the price setting of gasoline stations is strongly affected by commuter routes.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionspapier ; No. 180

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Market Structure, Pricing, and Design: General ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Market Structure, Firm Strategy, and Market Performance: General
• Subject: market definition ; gasoline market ; price tests ; competition ; k-means clustering ; hierarchical clustering

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bantle, Melissa ; Muijs, Matthias ; Dewenter, Ralf
• Event: Veröffentlichung
• (who): Helmut-Schmidt-Universität - Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre
• (where): Hamburg
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/184877
• Last update: 10.03.2025, 11:44 AM CET