Complementary Monopolies and Multi-Product Firms

8 Pages Posted: 27 May 2017

See all articles by Michael Kopel

Michael Kopel

University of Graz

Clemens Löffler

University of Applied Sciences for Management and Communication (FHWien der WKW)

Thomas Pfeiffer

University of Vienna - Accounting and Control

Date Written: May 26, 2017

Abstract

According to the classical result on complementary monopolies, a single-product firm unambiguously prefers purchasing complementary inputs from an integrated monopolistic supplier rather than from different non-integrated monopolistic suppliers. In this note, we account for the fact that firms often manufacture multiple products and show that the classical result on complementary monopolies can be reversed in such a case. Purchasing complementary inputs from non-integrated suppliers can be optimal for multi-product firms.

Keywords: complementary monopolies, multi-input sourcing, multi-product firms

Suggested Citation

Kopel, Michael and Löffler, Clemens and Pfeiffer, Thomas, Complementary Monopolies and Multi-Product Firms (May 26, 2017). Available at SSRN: https://ssrn.com/abstract=2975325 or http://dx.doi.org/10.2139/ssrn.2975325

Michael Kopel

University of Graz ( email )

Universitaetsstrasse 15 / FE
A-8010 Graz, 8010
Austria

Clemens Löffler (Contact Author)

University of Applied Sciences for Management and Communication (FHWien der WKW) ( email )

Währinger Gürtel 97
Vienna, 1180
Austria

Thomas Pfeiffer

University of Vienna - Accounting and Control ( email )

Oskar-Morgenstern-Platz 1
Vienna 1090, Vienna
Austria
+43-1-4277-38002 (Phone)
+43-1-4277-38004 (Fax)

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