Markets and the Evolution of Gas Stations

Markets and the Evolution of Gas Stations

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Abstract

Business historians often look to big firms or commodities markets to provide case studies. Examples of single actions by single individuals or corporations can be used as examples to prepare students for specific problems they might encounter in business. The development of industries such as gas stations, however, provides a more general way to think about how business decisions are made in the market. Gas station function and design developed in response to practical problems in the industry. Whereas gasoline providers were few in number, gas stations were plentiful. Inventions and innovations at various stations meant that there was much experimentation and differentiation in the market. Over time, the solutions to technical problems were disseminated, and the efficiency of putting gas in your automobile increased substantially. The history of gas stations demonstrates how dispersed market-based solutions were able to shape an increasingly efficient industry. In historical cases, we like to look for a single moment of decision. But when change is gradual, dispersed, and seemingly undirected, we need to look for larger processes at work. How can we best explain the development of the gas station? What forces directed its evolution, and what can we learn about how the market shapes industries?

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