Matteo Alvisi

The presence of multiple sellers in the provision of (non-substitutable) complementary goods leads to outcomes that are worse than those generated by an integrated monopoly, a problem also known as the «tragedy of the anticommons». In this paper we identify some conditions under which the tragedy is resolved and under which a complementary oligopoly is preferable to a multiproduct monopoly. First, we introduce several substitutes for each complement and determine their minimum number for the result to hold. Second, we study asymmetric complementarity and the presence of essential goods, stressing the role of the degree of differentiation across substitutes for the persistence of the «double mark-up» problem. Third, we verify whether the inefficiency result holds in dynamic terms, discussing the adoption of new technological standards in complementary oligopolies. The focus will be on indirect network externalities, checking under which conditions an inefficient standard emerges or the market becomes «locked in» in an old standard.