This article considers a duopoly in which each firm produces two components of a system. If the components are compatible, consumers may "mix and match" the firms' components. The system components and consumer tastes are assumed to differ with regard to vertical characteristics. In the model, one firm may be the quality leader in one or both characteristics. Moreover, a consumer's taste for the quality of one component may be perfectly correlated with, or independent of, his taste for the quality of the other component. It is shown that in all cases the sum of each producer's component prices is (weakly) higher if the components are compatible. The same is true of producer profits.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 23 (1992) Issue (Month): 4 (Winter) Pages: 535-547 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)