Competition Structure and Product Variety: Evidence from Greek Gas Stations

This study contributes to the classical debate on the causal relationship between competition intensity and product variety by looking at the Greek gasoline market, leveraging the unique geo- graphical characteristics of Greek islands to provide clear market definitions and exogenous variations in competition. Using the total number of gas stations within 3km as a measure of local competition, the paper finds a negative but statistically insignificant relationship between competition and prod- uct variety. Heterogeneity analysis reveals that this negative effect is more pronounced on larger and richer islands, despite the insignificance of results. Robustness checks using alternative mea- sures of competition, alternative measures of product variety, and different methodologies confirm the validity of these results.