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Product Differentiation and Market Power in the California Gasoline Market

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  • Germán Coloma

Abstract

This paper applies a model of market power measurement under product differentiation to the case of the gasoline market in California, using data for the period 1983–1989. Our results show that there is a considerable degree of product differentiation among major brands. This allows firms to exercise local market power over their own specific products, but there are also signals of an important degree of global market power. However, none of the four pure market structures analyzed (price taking, monopolistic competition, Cournot oligopoly and collusion) seems able to explain by itself the behavior of the whole market.

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  • Germán Coloma, 1999. "Product Differentiation and Market Power in the California Gasoline Market," Journal of Applied Economics, Taylor & Francis Journals, vol. 2(1), pages 1-27, May.
    • Handle: RePEc:taf:recsxx:v:2:y:1999:i:1:p:1-27
    DOI: 10.1080/15140326.1999.12040531
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    1. Shepard, Andrea, 1991. "Price Discrimination and Retail Configuration," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 30-53, February.
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    1. Germán Coloma, 2002. "The Effect of the Repsol-YPF Merger on the Argentine Gasoline Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 21(4), pages 399-418, December.
    2. Barron, John M. & Umbeck, John R. & Waddell, Glen R., 2008. "Consumer and competitor reactions: Evidence from a field experiment," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 517-531, March.

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