The Competition of Taiwan\'s Gas Station

We interviewed all Taiwan’s gas stations based on a three-day telephone interview survey, in which around 70% of them were successfully interviewed. Information, such as firm characteristics, best dollar and non-dollar discounts when consumers were fuelling gasoline, was collected.

We employed an econometric model to analyze the determinants of the discount behavior when consumers were fueling gasoline. We found that within 500 meters, an additional competitor significantly increased the best discount offered when consumers were fueling gasoline. This result holds even if we control the demand and supply side conditions in a market, the area effects and firm size clustering effects.