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What is the “right” geographic market definition?

Christos Genakos & Themistoklis Kampouris

International Journal of Industrial Organization2026https://doi.org/10.1016/j.ijindorg.2026.103266article
AJG 3ABDC A*
Weight
0.50

Abstract

This paper examines the “right” geographic definition of relevant markets by analyzing how excise tax pass-through varies with local competition in the retail gasoline market of a large metropolitan city. Using a natural experiment from three unanticipated and exogenous fuel tax hikes and detailed station-level price data, we show that average pass-through is invariant to the number of nearby competitors across various geographic definitions. This contrasts with theoretical predictions and prior island-based evidence, suggesting that the entire metropolitan area functions as a single market. Our findings challenge standard isodistance- or isochrone-based market delineations used in academic research and competition policy.

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https://doi.org/https://doi.org/10.1016/j.ijindorg.2026.103266

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@article{christos2026,
  title        = {{What is the “right” geographic market definition?}},
  author       = {Christos Genakos & Themistoklis Kampouris},
  journal      = {International Journal of Industrial Organization},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.ijindorg.2026.103266},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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