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Network Centrality and Market Prices: Empirical Evidence
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 behaviour and further find that the importance of
centrality increases with market size.
JEL-Codes:C21, D43, L11, L81, R12
Keywords:Network centrality; Spatial competition; Retail markets; Gasoline prices
Forschungsbereich:Regionalökonomie und räumliche Analyse
Sprache:Englisch