Product Differentiation and Market Power in the California Gasoline Market

Journal of Applied Economics, Vol. II, No. 1, pp. 1-27, May 1999

Posted: 10 Jun 2004

Abstract

This paper applies a model of market power measurement under product differentiation to the case of the gasoline market in California, using data for the period 1983-1989. Our results show that there is a considerable degree of product differentiation among major brands. This allows firms to exercise local market power over their own specific products, but there are also signals of an important degree of global market power. However, none of the four pure market structures analyzed (price taking, monopolistic competition, Cournot oligopoly and collusion) seems able to explain by itself the behavior of the whole market.

Suggested Citation

Coloma, German, Product Differentiation and Market Power in the California Gasoline Market. Journal of Applied Economics, Vol. II, No. 1, pp. 1-27, May 1999, Available at SSRN: https://ssrn.com/abstract=555867

German Coloma (Contact Author)

CEMA University ( email )

Department of Economics
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Argentina
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HOME PAGE: http://https://ucema.edu.ar/german-coloma

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