Multimarket Oligopoly: Strategic Substitutes and Complements
@article{Bulow1985MultimarketOS, title={Multimarket Oligopoly: Strategic Substitutes and Complements}, author={Jeremy I. Bulow and J. Geanakoplos and P. Klemperer}, journal={Journal of Political Economy}, year={1985}, volume={93}, pages={488 - 511} }
A firm's actions in one market can change competitors' strategies in a second market by affecting its own marginal costs in that other market. Whether the action provides costs or benefits in the second market depends on (a) whether it increases or decreases marginal costs in the second market and (b) whether competitors' products are strategic substitutes or strategic complements. The latter distinction is determined by whether more "aggressive" play (e.g., lower price or higher quantity) by… CONTINUE READING
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