European Business Schools Librarian's Group
Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics
Network Centrality and Market Prices: An Empirical Note
Matthias Firgo (), Dieter Pennerstorfer () and Christoph R. Weiss ()
Additional contact information
Matthias Firgo: Austrian Institute of Economic Research (WIFO)
Dieter Pennerstorfer: Department of Economics, Vienna University of Economics and Business; Austrian Institute of Economic Research (WIFO)
Christoph R. Weiss: Department of Economics, Vienna University of Economics and Business
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.
Keywords: Network Centrality, Spatial Competition, Retail Markets, Gasoline Prices
JEL-codes: C21; D43; L11; L81; R12 September 2015
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