Gasoline stations set prices to match a small number of other stations

For many years, there have been competition concerns regarding how retail gasoline prices are set in the U.S. and Canada. Consumers have complained about the perceived uniformity of retail gas prices and the perception that retailers raise their prices at the same time. A new study in Economic Inquiry shows that to a large extent, gas stations do set prices to match a small number of other gas stations. However, these stations are not necessarily the closest in distance.

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