Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

Mix and Match Compatibility with Vertical Product Dimensions

Michael A. Einhorn
The RAND Journal of Economics
Vol. 23, No. 4 (Winter, 1992), pp. 535-547
Published by: Wiley on behalf of RAND Corporation
Stable URL: http://www.jstor.org/stable/2555904
Page Count: 13
  • Read Online (Free)
  • Download ($24.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Mix and Match Compatibility with Vertical Product Dimensions
Preview not available

Abstract

This article considers a duopoly in which each firm produces two components of a system. If the components are compatible, consumers may "mix and match" the firms' components. The system components and consumer tastes are assumed to differ with regard to vertical characteristics. In the model, one firm may be the quality leader in one or both characteristics. Moreover, a consumer's taste for the quality of one component may be perfectly correlated with, or independent of, his taste for the quality of the other component. It is shown that in all cases the sum of each producer's component prices is (weakly) higher if the components are compatible. The same is true of producer profits.

Page Thumbnails

  • Thumbnail: Page 
535
    535
  • Thumbnail: Page 
536
    536
  • Thumbnail: Page 
537
    537
  • Thumbnail: Page 
538
    538
  • Thumbnail: Page 
539
    539
  • Thumbnail: Page 
540
    540
  • Thumbnail: Page 
541
    541
  • Thumbnail: Page 
542
    542
  • Thumbnail: Page 
543
    543
  • Thumbnail: Page 
544
    544
  • Thumbnail: Page 
545
    545
  • Thumbnail: Page 
546
    546
  • Thumbnail: Page 
547
    547