Price-Matching Strategies in the German Gasoline Retail Market

35 Pages Posted: 28 Dec 2015 Last revised: 10 Mar 2016

Sascha Wilhelm

Goethe University Frankfurt, Department of Management and Applied Microeconomics

Date Written: March 10, 2016

Abstract

This article investigates how prices are affected by price matching in the German gasoline retail market. The effects are noted for implementing and consulted (i.e. retailers whose prices are matched) retailers. While analyzing an extensive panel data set, I find a 11-14% markup increase for a relatively more expensive brand. A relatively inexpensive brand and its consulted stations decrease their prices. Evidence is found that price matching can enhance other price discrimination strategies by 43%. I cannot verify theoretical and empirical literature predicting that price matching has competition-reducing motives.

Keywords: Price-matching policy, Price discrimination, Gasoline Pricing

JEL Classification: L11, L71

Suggested Citation

Wilhelm, Sascha, Price-Matching Strategies in the German Gasoline Retail Market (March 10, 2016). Available at SSRN: https://ssrn.com/abstract=2708630 or http://dx.doi.org/10.2139/ssrn.2708630

Sascha Wilhelm (Contact Author)

Goethe University Frankfurt, Department of Management and Applied Microeconomics ( email )

Germany

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