Journal of Industry, Competition and Trade

, Volume 6, Issue 3–4, pp 225–234 | Cite as

Market Concentration and Product Variety under Spatial Competition: Evidence from Retail Gasoline



We show that for a spatially differentiated economy reduced product variety is the likely outcome of mergers except in cases where exit costs in relation to (outlet specific) fixed costs are high. Our empirical analysis of the Austrian retail gasoline market confirms that increases in concentration reduce product variety. Ignoring this product variety effect is likely to lead to an underestimate of market power in structural merger analysis.


spatial product differentiation retail gasoline mergers concentration 

JEL Classifications

L11 L13 L90 


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Copyright information

© Springer Science + Business Media, LLC 2006

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of ViennaViennaAustria

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