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Joshua Karl Austin
''Vertical integration and pricing outcomes in retail gasoline markets''
( 2015, Vol. 35 No.4 )
The real world impact of vertical integration on prices for consumers remains a controversial topic. Economic theory suggests that there are multiple effects of vertical integration on prices which work in opposite directions. This paper employs high frequency panel data from a regional U.S. market to determine which effects are dominant at retail gasoline stations. Using two different techniques, I find that vertically-integrated company-operated gasoline stations charge prices five to eleven cents lower than non-integrated, lessee-operated gasoline stations.
Keywords: vertical integration, retail gasoline, divorcement, fixed-effects, economics
JEL: L2 - Firm Objectives, Organization, and Behavior: General
L8 - Industry Studies: Services: General
Manuscript Received : Jul 17 2015 Manuscript Accepted : Oct 02 2015

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