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Network Centrality and Market Prices: Empirical Evidence

Firgo, Matthias and Pennerstorfer, Dieter and Weiss, Christoph (2016) Network Centrality and Market Prices: Empirical Evidence. Economics Letters, 139. pp. 79-83. ISSN 0165-1765

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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.

Item Type: Article
Additional Information: The work was generously supported by funds of the Oesterreichische Nationalbank (Anniversary Fund, project number: 12974). To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription. The original publication is available at www.elsevier.com.
Keywords: Network Centrality, Spatial Competition, Retail Markets, Gasoline Prices
Classification Codes: JEL C21, D43, L11, L81, R12
Divisions: Departments > Volkswirtschaft > Volkswirtschaftspolitik u Industrieökon.
Version of the Document: Accepted for Publication
Depositing User: Gertraud Novotny
Date Deposited: 07 Jun 2017 17:44
Last Modified: 08 Jun 2017 11:13
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/73843/
URI: http://epub.wu.ac.at/id/eprint/5582

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