Price uniformity and competition in a retail gasoline market

The purpose of this paper is to examine the price uniformity prediction of the competitive market model of retail gasoline pricing using station specific data on gasoline prices from Vancouver, BC. The specified econometric model also generates results that describe the actual pricing pattern in the market and that permit an assessment of tacit collusion and imperfectly competitive non-collusive competition as possible alternative explanations for the results. Contrary to the competitive model, variables measuring brand effects, spatial and product characteristics, local market structure, and time series variation do affect the probability that a station matches the market mode price. (C) 2004 Elsevier B.V. All rights reserved.