This study uses a traditional empirical entry model to investigate the degree of competition in local gas stations markets in Brazil. The model shows how the number of firms in an oligopolistic market varies with changes in demand and market competition with data for 2.590 geographically isolated markets. The results demonstrate that competitive conduct changes as the number of gas stations increases, especially before the entry of the fifth firm. The model used does not require price data and, through other market characteristics such population and number of firms, it can indicate if there is a global anti-competitive pattern in the wholesale gasoline industry at small Brazilian municipalities.
Entry model; Gas stations; Competition
