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This dissertation studies price-setting behavior in the retail gasoline industry. The main questions addressed are: How important is a retail station’s brand and proximity to competitors when retail stations set price? How do retailers adjust their pricing when they cater to consumers who are less aware of competing options or have less discretion over where they purchase gasoline? These questions are explored in two separate analyses using a unique datasets containing retail pricing behavior of stations in California and in 24 different metropolitan areas.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    The Gasoline Market

  • Chapter Three

    Strategic Price Setting in Retail Gasoline Markets: The Influence of Brand and Location

  • Chapter Four

    Measuring Market Power. A Case Study

  • Chapter Five

    Implications for Antitrust Regulation

  • Chapter Six

    Conclusions

  • Appendix A

    Figures

  • Appendix B

    Regression Results

  • Appendix C

    Maps

  • Appendix D

    Rental Car Market

  • Appendix E

    Merger Case History

Research conducted by

This document was submitted as a dissertation in July 2010 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Thomas Light (Chair), Martin Wachs, and David Loughran.

This report is part of the RAND Corporation Dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.

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