Imagine walking into a store and noticing that certain products are always available while their close substitutes are strangely absent. Is this just a coincidence or could there be something more strategic at play?
This episode explores the hidden world of product-space collusion, a subtle anti-competitive behaviour where companies coordinate their product offerings to minimize competition and control markets. We go beyond traditional price-fixing schemes and examine how firms can manipulate product variety, and geographic availability, and even introduce new products to maintain market dominance. Using the soft drink industry as a case study, we analyze the competitive dynamics between giants like Coca-Cola and Pepsi and examine how their product placement strategies might be more calculated than they appear. This episode unpacks the complexities of product-space collusion, exploring:
●The key differences between product-space collusion and traditional price-based collusion.
●How companies use product differentiation and market segmentation to limit consumer choice and potentially increase prices.
●The challenges in detecting and proving product-space collusion, which often requires sophisticated economic modelling and data analysis.
●The potential impact of this behavior on consumer welfare and market competition.
Join us as we uncover companies' subtle strategies to control what we buy and expose the hidden forces that shape our choices in the marketplace.
