The Heterogeneous Effects of Entry on Prices
- Author(s)
- Kai Fischer, Simon Martin, Philipp Schmidt-Dengler
- Abstract
We study the effect of entry on the price distribution in the German retail gasoline market. Exploiting several hundred entries over five years in an event study design, we find that entry causes a persistent first-order stochastic shift in the price distribution for at least three years after entry. Prices at the top of the distribution change moderately or not at all, but prices at the left tail decrease by up to 139 of stations’ gross margins after entry within a 1 km (2 km) radius. The value of information (VOI) increases by 2915 in 1 km (2 km) markets, suggesting larger savings for consumers with easy access to information.
- Organisation(s)
- Department of Economics
- External organisation(s)
- Wirtschaftsuniversität Wien (WU)
- Journal
- Journal of the European Economic Association
- Pages
- 1-45
- ISSN
- 1542-4766
- DOI
- https://doi.org/10.1093/jeea/jvaf061
- Publication date
- 12-2025
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502013 Industrial economics
- Portal url
- https://ucrisportal.univie.ac.at/en/publications/f5f1d5b0-15f5-4442-92ee-56865cda0de8