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- Publisher
- Wiley
- Copyright
- 2007 RAND
- ISSN
- 0741-6261
- eISSN
- 1756-2171
- DOI
- 10.1111/j.1756-2171.2007.tb00077.x
- Publisher site
- See Article on Publisher Site
Abstract
We develop a model in which a main product (called product A) provides a performance quality z by itself, whereas a complementary product (called product B) is useless by itself but enhances the main product's performance quality to q > z. This asymmetric complementarity gives rise to the following results. First, if z is relatively small, then firms A and B behave as if the products are symmetrically complementary with the usual double marginalization problem. Second, if z is sufficiently large, then firms A and B price their products as if they are independent. Third, over a certain range of intermediate z, no pure‐strategy Nash equilibrium exists.
Journal
The Rand Journal of Economics – Wiley
Published: Jun 1, 2007