Network Centrality and Market Prices: Empirical Evidence
Sprache des Titels:
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.