Product Similarity and Cross-Price Elasticity

Sreya Kolay () and Rajeev K. Tyagi ()
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Sreya Kolay: University of California Irvine
Rajeev K. Tyagi: University of California Irvine

Review of Industrial Organization, 2018, vol. 52, issue 1, No 3, 85-100

Abstract: Abstract We use a spatial competition model to show how an increasing similarity between two products can monotonically increase, monotonically decrease, or have a non-monotonic effect on cross-price elasticity. We relate these results to prior research that links cross-price elasticity to product similarity, and the literature on market structure, merger analysis, and price discrimination.

Keywords: Cross-price elasticity; Product similarity; Spatial competition (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11151-017-9578-8

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