Erdvinė kainų konkurencija mažmeninėse Vokietijos degalų rinkose

This paper investigates the globality of German retail gasoline market by studying price re- action functions of neighbouring gasoline stations. The data under analysis originates from a very detailed Germany gasoline station price database for the year 2015. Models of reaction functions were estimated using Bertrand-Hotelling framework; the spatial component was introduced via a weighing matrix. Three main methods were employed to construct the weighing matrix and thus examine the nature of spatial competition: nearest neighbours, border neighbours and Euclidean distance neighbours. The results strongly point to local competition as local models describe the reaction functions most accurately. Furthermore, temporal reaction functions (containing lagged independent variables) were investigated and persistence in price forming behaviour was found. Lastly, hypothesis of vertical (brand level) price competition was rejected