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Price Tests to Define Markets: An Application to Wholesale Gasoline in Canda

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  • Eva Audy
  • Can Erutku

Abstract

The concept of relevant markets is fundamental to antitrust analysis, particularly to those relating to mergers. However, defining relevant markets is sometimes difficult ot operationalize. This has triggered a substantial literature in which price tests have been used to define both economic and antitrust markets. This paper reviews some price tests and applies them in order to define relevant geographic markets in wholesale gasoline in Canada. We find that relevant geographic markets can be larger than cities but smaller than East and West Canada. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Eva Audy & Can Erutku, 2005. "Price Tests to Define Markets: An Application to Wholesale Gasoline in Canda," Journal of Industry, Competition and Trade, Springer, vol. 5(2), pages 137-154, June.
    • Handle: RePEc:kap:jincot:v:5:y:2005:i:2:p:137-154
    DOI: 10.1007/s10842-005-3721-1
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    References listed on IDEAS

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    1. Stigler, George J & Sherwin, Robert A, 1985. "The Extent of the Market," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 555-585, October.
      • Stigler, George J. & Sherwin, Robert A., 1983. "The Extent of the Market," Working Papers 31, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    2. Uri, Noel D & Rifkin, Edward J, 1985. "Geographic Markets, Causality and Railroad Deregulation," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 422-428, August.
    3. Klein, Chris & Rifkin, Edward J. & Uri, Noel D., 1985. "A note on defining geographic markets," Regional Science and Urban Economics, Elsevier, vol. 15(1), pages 109-119, February.
    4. Slade, Margaret E, 1986. "Exogeneity Tests of Market Boundaries Applied to Petroleum Products," Journal of Industrial Economics, Wiley Blackwell, vol. 34(3), pages 291-303, March.
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    Citations

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    Cited by:

    1. Muijs, Matthias & Bantle, Melissa, 2019. "A New Price Test in Geographic Market Definition - An Application to German Retail Gasoline Market," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203564, Verein für Socialpolitik / German Economic Association.
    2. Jordi Perdiguero & Joan Ramon Borrell, 2019. "Driving competition in local markets with near-perfect substitutes: an application on the Spanish retail gasoline market," Empirical Economics, Springer, vol. 57(1), pages 345-364, July.
    3. Benjamin Atkinson, Andrew Eckert, and Douglas S. West, 2014. "Daily Price Cycles and Constant Margins: Recent Events in Canadian Gasoline Retailing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    4. Can Erutku, 2007. "Les prix élevés de l'essence avant les longues fins de semaine : mythe ou réalité ?," Canadian Public Policy, University of Toronto Press, vol. 33(1), pages 85-92, March.
    5. Alderighi, Marco & Baudino, Marco, 2015. "The pricing behavior of Italian gas stations: Some evidence from the Cuneo retail fuel market," Energy Economics, Elsevier, vol. 50(C), pages 33-46.

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