Do Smartphones Spur Competition? Evidence from the Korean Retail Gasoline Market.
Do Smartphones Spur Competition? Evidence from the Korean Retail Gasoline Market.
- 한국재정학회(구 한국재정·공공경제학회)
- 한국재정학회 학술대회 논문집
- 2016년도 경제학 공동학술대회
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2016.021 - 39 (39 pages)
- 5
Smartphones, as information-providing devices, can improve market performance and reduce price dispersion. This paper treats the introduction of smartphones in the Korean gasoline market as a natural experiment to investigate the impact of smartphones on competition among gas stations. Smartphones provided consumers with direct access to price information through OPINET, a government-sponsored Internet website. Our results indicate that the adoption of smartphones is associated with dramatic decreases in price dispersion and average price-cost margins, thereby creating consumer gains. Additionally, we found a sudden decline in entries and a slow increase in exits after the introduction of smartphones.
1 Introduction
2 Backgrounds: OPINET and smartphones
3 Theoretical model and predictions
4 Data and identification strategy
5 Empirical results: price-setting behavior
6 The consequence: entry and exit behavior
7 Concluding remarks
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