We analyze the monopolist’s decision about how to design different versions of a good, i.e. whether to make them substitutes or complements, when consumers can buy them simultaneously. In this context, we find that versioning goods as substitutes or complements may be optimal for the monopolist, and the final result depends on the degree of concavity and convexity of the cost function.
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Paper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number
07/06.
Find related papers by JEL classification: L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
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