Mutually related firms and the rationality of producing nothing

Dobson, Paul W. ORCID: https://orcid.org/0000-0001-7352-740X (1992) Mutually related firms and the rationality of producing nothing. Managerial and Decision Economics, 13 (6). pp. 485-491. ISSN 1099-1468

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Abstract

This paper considers the pricing and output decisions of firms which are related by the complementary nature of their products. The paper focuses on the problems which may result from non-co-operative behaviour of such firms. At the extreme, it is shown that non-cooperative complementary firms may ‘rationally’ choose to produce nothing. The paper considers the conditions which lead to this market failure result, and whether encouragement by government for the firms to co-operate or merge is required to make the market operate more efficiently.

Item Type:	Article
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
UEA Research Groups:	Faculty of Social Sciences > Research Groups > Responsible Business Regulation Group Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Depositing User:	Lucy Piper
Date Deposited:	01 Apr 2011 15:57
Last Modified:	05 May 2024 00:56
URI:	https://ueaeprints.uea.ac.uk/id/eprint/27706
DOI:	10.1002/mde.4090130604

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