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The Competitive Impact of Hypermarket Retailers on Gasoline Prices
Paul R. Zimmerman
The Journal of Law & Economics
Vol. 55, No. 1 (February 2012), pp. 27-41
Published by: The University of Chicago Press for The Booth School of Business, University of Chicago and The University of Chicago Law School
Stable URL: http://www.jstor.org/stable/10.1086/661194
Page Count: 15
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AbstractHypermarkets are large retail suppliers of general merchandise or grocery items that also sell gasoline, often at very low margins. This paper estimates the impact of hypermarkets on average state-level retail gasoline prices and margins. The empirical results indicate an economically and statistically significant price-decreasing effect of increased hypermarket competition. The estimations also suggest that refiners lower the delivered wholesale prices charged to their affiliated lessee-dealer and open-dealer stations in response to increased hypermarket competition, which in turn translates to lower retail (street) prices. The adoption of sales-below-cost laws may lessen the price-reducing effects from hypermarket competition.
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