Supermarket and Gasoline: An Empirical Study of Bundled Discount

Zhongmin Wang
2010 Social Science Research Network  
Many supermarkets offer grocery-gasoline bundled discounts whereby supermarket customers whose grocery purchase is above a certain dollar amount are offered a gasoline price discount. This paper takes a first step toward understanding this practice of bundled discount. We use nearly ideal gasoline price data to study the short-and long-run competitive effects of grocery-gasoline bundled discounts in an Australian market. The evidence suggests that bundling gasoline sites operated by
more » ... ated by supermarkets are pro-competitive in the short run and competition-neutral in the long run, and that supermarkets offer grocery-gasoline bundled discounts for non-exclusionary reasons.
doi:10.2139/ssrn.1628770 fatcat:e64biwvmivgkhaxlj5njykiz6q