Imperfect competition with complements and substitutes

Daniel Quint

Journal of Economic Theory, 2014, vol. 152, issue C, 266-290

Abstract: I study price competition in settings where end products are combinations of components supplied by different monopolists, nesting standard models of perfect complements and imperfect substitutes. I show sufficient conditions for a discrete-choice demand system to yield demand for each product which is log-concave in price, and has log-increasing differences in own and another product's price, leading to strong comparative statics results. Many results familiar from simple models, like the price effects of mergers or changes in marginal costs, extend naturally to this more complex setting.

Keywords: Substitutes; Complements; Mergers; Imperfect competition (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:152:y:2014:i:c:p:266-290

DOI: 10.1016/j.jet.2014.05.004

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