On price competition with complementary goods

We consider a duopoly industry with two separate firms each selling an indi visible product. The joint consumption of these goods has a specific value for the consumers which exceeds the mere addition of utilities when product s are consumed in isolation: the higher this excess, the larger the complem entarity between the goods. We analyse price equilibria in this market as r elated to the degree of complementarity existing between the two products. (C) 2001 Elsevier Science B.V. All rights reserved.