I am the first to admit that I will never will a nobel prize in economics.
I just want to know why Exxon does not run specials, coupons, sales, to try and take business away from Shell?
Dominos is trying to bury Papa John's who is trying to bury Pizza Hut.
Why isn't Exxon trying to bury Shell?
My response was not an insult to your question. It is a reasonable question, although it seems based on presumptions about the costs of doing business; i.e. that there is no cost basis justifying the current high price of gasoline, which is popularly assumed but has no basis in fact. If the industry has narrowed the margins to a reasonable rate, and pushing them lower begins to put someone out of business, would the market be the winner?
Think for a minute what would happen if they did. How would that affect the supply-demand situation, the position of the US in the energy market (though Royal Dutch Shell plc/Koninklijke Nederlandse Shell NV is not American owned, it clearly does significant business here).
There's a basic question to ask yourself, that most of the experts probably wouldn't bother asking themselves. If Exxon "buried" Shell, you would have fewer choices and less price competition.
It is mythical to understand the term "free market" to be "darwinian." This is because a) darwinism is a myth and b) the best management of resources is ensured by a diverse and highly skilled private industry -- not one, single, dominating "fittest survivor," as is implied by popular misconceptions about the function of free markets.
i think a lot of it is that gasoline is truly a fungible commodity, even at the retail level. Customer loyalty would be based more on credit-card incentives/motives, location inducements (a store in the station, a garage), and convenience of location.
Otherwise they are all pretty much the same. You aren't going to get much in the way of customer loyalty with a one-off promo, when the promo is over people will just go back to their normal pattern.