Suchergebnisse

This paper investigates the feasibility of full/partial complementary alliances in composite goods markets with network structure. There are multiple producers who each provide a complementary component of the composite good. In another related market, one single firm (a monopolist) produces another composite good which could be a substitute or complement of the composite good. The analysis shows that even a full alliance cannot be profitable when the number of producers is small and the two goods are close substitutes or complements. Moreover, none of the profitable alliances is stable, except the full alliance with two component producers.

This study investigates the choice between complementary and parallel alliances in a market with vertical and horizontal externalities. One composite goods firm competes with two components producers, each providing a complementary component of a differentiated composite good. Although the joint profits from a parallel alliance between the composite goods firm and a components producer are always larger than those from a complementary alliance between components producers, through Nash bargaining, a components producer prefers the complementary (parallel) alliance when the degree of product differentiation is sufficiently large (small). Combined with the result that a complementary alliance is socially preferable, our findings provide meaningful implications for antitrust policy.