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Market Power in the Argentine Liquid Fuels Wholesale Chain

Author

Listed:
  • M. T. Verónica Culós

    (Universidad Nacional de Cuyo)

  • M. Florencia Gabrielli

    (Universidad Nacional de Cuyo/CONICET)

  • Marcos Herrera Gómez

    (IELDE-UNSa/CONICET)

Abstract

The liquid fuels market in Argentina is characterized by a high level of concentration, especially in local geographic areas. This paper studies the demand of the liquidfuels wholesale chain in Argentina, using the discrete choice approach, based on the premise that different firms offer differentiated goods, by virtue of the intrinsic characteristics of the good, and that such differentiation gives them the power to set prices above marginal production costs. The difference between prices and marginal costs determines the firm’s market power. Using a novel dataset, we provide new empirical evidence that quantifies market power across firms and regions.

Suggested Citation

  • M. T. Verónica Culós & M. Florencia Gabrielli & Marcos Herrera Gómez, 2022. "Market Power in the Argentine Liquid Fuels Wholesale Chain," Working Papers 157, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:157
    as

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    File URL: https://rednie.eco.unc.edu.ar/files/DT/157.pdf
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    References listed on IDEAS

    as
    1. Céline Bonnet & Pierre Dubois, 2010. "Inference on vertical contracts between manufacturers and retailers allowing for nonlinear pricing and resale price maintenance," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 139-164, March.
    2. Steven T. Berry & Philip A. Haile, 2014. "Identification in Differentiated Products Markets Using Market Level Data," Econometrica, Econometric Society, vol. 82, pages 1749-1797, September.
    3. Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
    4. Bokhari, Farasat A.S. & Mariuzzo, Franco, 2018. "Demand estimation and merger simulations for drugs: Logits v. AIDS," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 653-685.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Liquid Fuels; Market Power; Product Differentiation.;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

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