Is the German Retail Gas Market Competitive?

29 Pages Posted: 13 Jun 2015

See all articles by Alexander Kihm

Alexander Kihm

German Aerospace Center

Nolan Ritter

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Colin Vance

Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)

Date Written: December 17, 2014

Abstract

We explore whether non-competitive pricing prevails in Germany’s retail gasoline market by examining the influence of the crude oil price on the retail gasoline price, focusing specifically on how this influence varies according to the brand and to the degree of competition in the vicinity of the station. Our analysis identifies several factors other than cost – including the absence of nearby competitors and regional market concentration – that play a significant role in mediating the influence of the oil price on the retail gas price, suggesting price setting power among stations.

Keywords: Panel data; quantile regression; spatial competition; gasoline market

JEL Classification: C33, Q41, R41

Suggested Citation

Kihm, Alexander and Ritter, Nolan and Vance, Colin, Is the German Retail Gas Market Competitive? (December 17, 2014). Available at SSRN: https://ssrn.com/abstract=2566251 or http://dx.doi.org/10.2139/ssrn.2566251

Alexander Kihm

German Aerospace Center ( email )

Sportallee 54a
Hamburg, 22335
Germany

Nolan Ritter

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

Colin Vance (Contact Author)

Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany
0049-201-8149-237 (Phone)

HOME PAGE: http://www.rwi-essen.de

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