Competition and Integration among Complements, and Network Market Structure

Nicholas Economides () and Steven C Salop

Journal of Industrial Economics, 1992, vol. 40, issue 1, 105-23

Abstract: This article analyzes the competition and integration among complementary products that can be combined to create composite goods or systems. The model generalizes the Cournot duopoly complements model to the case in which there are multiple brands of compatible components. It analyzes equilibrium prices for a variety of organizational and market structures that differ in their degree of competition and integration. The model applies to a variety of product networks, including automatic teller machines, real estate multiple listing services, and airlines CRS, as well as to nonnetwork markets of compatible components such as computer CPUs and peripherals, hardware and software, and long distance and local telephone services. Copyright 1992 by Blackwell Publishing Ltd.

Date: 1992
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