Complementarity without Superadditivity / Steven Berry, Philip Haile, Mark Israel, Michael Katz.

Format:

Book

Author/Creator:

Berry, Steven.

Contributor:

National Bureau of Economic Research.

Haile, Philip.

Israel, Mark.

Katz, Michael.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22811.

NBER working paper series no. w22811

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

The distinction between complements, substitutes, and independent goods is important in many contexts. It is well known that when consumers' conditional indirect utilities for two goods are superadditive, the goods are gross complements. Generalizing insights in Gans and King (2006) and Gentzkow (2007), we show that superadditivity between one pair of goods can also introduce complementarity between competing pairs of goods. One implication is that lower prices can result from a merger between producers of goods that themselves offer no superadditivity.

Notes:

Print version record

November 2016.