Identifying profitable self-service markets: A test in gasoline retailing

The increased presence of self-service products is explored. A model is constructed that views service as an attribute of a product bundle that can be separated to create a self-service substitute. In terms of market elasticities and revenues we suggest an analytical measure of a seller's incentive to debundle service. For retail gasoline markets, we empirically estimate with reduced form equations the own and cross price elasticities of full- and self-service demand across Standard Metropolitan Statistical Areas in the United States to show that regional differences in sales of self-service gasoline are explained by our measure.