We highlight the importance of "centrality" for pricing. Firms characterized by a more central position in a spatial network are more powerful in terms of having a stronger impact on their competitors' prices and on equilibrium prices. These propositions are derived from a simple theoretical model and investigated empirically for the retail gasoline market of Vienna, Austria. We compute a measure of network centrality based on the locations of gasoline stations in the road network. Results from a spatial autoregressive model show that prices of gasoline stations are more strongly correlated with prices of central competitors.
| Identifer | oai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:5584 |
| Date | 05 1900 |
| Creators | Weiss, Christoph, Pennerstorfer, Dieter, Firgo, Matthias |
| Publisher | Elsevier |
| Source Sets | Wirtschaftsuniversität Wien |
| Language | English |
| Detected Language | English |
| Type | Article, PeerReviewed |
| Format | application/pdf |
| Relation | http://dx.doi.org/10.1016/j.ijindorg.2015.03.009, http://www.elsevier.com, http://epub.wu.ac.at/5584/ |
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