Some Comparative Statics Of Entry In Markets With Demand Complementarities

Abstract

This paper develops a two-market Cournot model with complementary demands to investigate comparative statics associated with symmetric and asymmetric entry. Notably, while market prices are decreasing with the number of market rivals, asymmetric entry actually causes prices to rise in the adjacent, complementary market. In addition, the price-decreasing effects of symmetric entry are attenuated with strong cross-price effects.