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Network Centrality and Market Prices: An Empirical Note

Firgo, Matthias and Pennerstorfer, Dieter and Weiss, Christoph (2015) Network Centrality and Market Prices: An Empirical Note. Department of Economics Working Paper Series, 206. WU Vienna University of Economics and Business, Vienna.

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Abstract

We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station located most closely to the market center - defined as the 1-median location - exerts the strongest effect on pricing decisions of other stations. We conclude that centrality influences firms' pricing behavior and further find that the importance of centrality increases with market size. (authors' abstract)

Item Type: Paper
Keywords: Network Centrality / Spatial Competition / Retail Markets / Gasoline Prices
Classification Codes: JEL C21, D43, L11, L81, R12
Divisions: Departments > Volkswirtschaft
Depositing User: Claudia Tering-Raunig
Date Deposited: 23 Sep 2015 17:09
Last Modified: 26 Jul 2016 14:28
URI: http://epub.wu.ac.at/id/eprint/4651

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