35 Pages Posted: 28 Dec 2015 Last revised: 10 Mar 2016
Date Written: March 10, 2016
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: Suggested Citation