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Versioning Goods and Joint Purchase: Substitution and Complementarity Strategies

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  • Francisco Martinez

    (Department of Economic Theory and Economic History, University of Granada.)

Abstract

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.

Suggested Citation

  • Francisco Martinez, 2007. "Versioning Goods and Joint Purchase: Substitution and Complementarity Strategies," ThE Papers 07/06, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:07/06
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Versioning Goods; Joint Purchase Option; Substitutes; Complementarity; Price Discrimination; Market Segmentation.;
    All these keywords.

    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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