Hotelling competition with multi-purchasing: Time Magazine, Newsweek, or both?

摘要: Equilibrium prices behave quite differently if consumers single-purchase (buy either Time Magazine or Newsweek) some multi-purchase both). Prices are strategic complements under single-purchase, and increase with magazine quality. In a regime strategically independent because firms then act monopolistically by pricing the incremental benefit to marginal consumers. Furthermore, can decrease quality due overlapping content. Higher preference heterogeneity increases profits in equilibrium but decreases them multi-purchase. We determine when each holds, present detailed reaction function analysis which applies more generally duopoly pricing.