MERGERS OF PRODUCERS OF COMPLEMENTS: HOW AUTONOMOUS MARKETS CHANGE THE PRICE EFFECTS

We analyze the price effects of mergers to monopoly between producers of complementary goods when there exists a fraction of consumers that value only one of the components. We show that customers are more likely to face a price decrease for the composite good under this setting than when such consumers do not exist. Copyright � 2009 The Authors. Journal compilation � 2009 Blackwell Publishing Ltd and The University of Manchester.