Imre Gémes, MA student of Corvinus University, member of Rajk College and Research Assistant of ANETI Lab rceived the first rize in the Regional Economy section.

Title: Spatial Interaction Between Fuel Stations in the Hungarian Retail Gasoline Market

Abstract: Several shocks have hit the Hungarian fuel market in recent years, particularly affecting
small fuel brands, consequently influencing the market ecosystem and consumer well-being.
To ensure a balanced functioning of the market, it is essential to understand how these small
brands interact with other participants. This paper investigates how the small fuel brands with
only a few stations spatially interact with other stations in the Hungarian 95-octane gasoline
market. The paper reveals how the change in price level charged by competitors affects the price
changes of the small station itself. Effects are separated by the type of competitor in the local
market of a station, defined as a circular area. By gradually increasing the radius of the relevant
local markets, it is shown how spatial dependence unfolds as a function of distance. In a similar
setup, concentric rings are introduced instead of circular markets to mitigate the distortions of
heterogeneous station network density. Overall, the prices charged by large premium brands
have the highest and most persistent effect in distance, followed by large discount and other
small stations. Spatially relevant large premium and large discount brands are located within a
10-kilometer radius area of the small brands, while relevant small brands are located no further
than 5 kilometers from the respective small station. In these wide ranges, the level of interaction
falls rapidly with distance. The results may be of interest to competition authorities in market
definition and to urban planners deciding on new station locations.

Consultant: Barnabás Bakó, Corvinus University of Budapest