Make me a market on US gas stations

Question

Interviewer: "Make me a market on the number of gas stations in the United States, in thousands. I may trade either side." Give a bid and an ask, and explain how you chose the width.

Accepted Answer

Step 1: Fair value by decomposition. Start from population: about 330 million people. Guess one station serves roughly 2{,}500 people (a small town of that size has a couple of stations, so this is in range). That gives \frac{330{,}000{,}000}{2{,}500} \approx 130{,}000 	ext{ stations}, so a fair around 130 (thousands). A cross-check via vehicles: about 280 million vehicles, each visiting a station say weekly, a station serving maybe 500 fill-ups a day, lands in the same ballpark. Two independent routes agreeing raises confidence. Step 2: Uncertainty. The weak link is "2{,}500 people per stat…

Make me a market on US gas stations

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