License: Creative Commons Attribution 3.0 Unported license (CC BY 3.0)
When quoting this document, please refer to the following
DOI: 10.4230/LIPIcs.ICALP.2017.134
URN: urn:nbn:de:0030-drops-74757
URL: http://dagstuhl.sunsite.rwth-aachen.de/volltexte/2017/7475/
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Babaioff, Moshe ; Blumrosen, Liad ; Nisan, Noam

Selling Complementary Goods: Dynamics, Efficiency and Revenue

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Abstract

We consider a price competition between two sellers of perfect-complement goods. Each seller posts a price for the good it sells, but the demand is determined according to the sum of prices. This is a classic model by Cournot (1838), who showed that in this setting a monopoly that sells both goods is better for the society than two competing sellers.

We show that non-trivial pure Nash equilibria always exist in this game. We also quantify Cournot's observation with respect to both the optimal welfare and the monopoly revenue. We then prove a series of mostly negative results regarding the convergence of best response dynamics to equilibria in such games.

BibTeX - Entry

@InProceedings{babaioff_et_al:LIPIcs:2017:7475,
  author =	{Moshe Babaioff and Liad Blumrosen and Noam Nisan},
  title =	{{Selling Complementary Goods: Dynamics, Efficiency and Revenue}},
  booktitle =	{44th International Colloquium on Automata, Languages, and Programming (ICALP 2017)},
  pages =	{134:1--134:14},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-041-5},
  ISSN =	{1868-8969},
  year =	{2017},
  volume =	{80},
  editor =	{Ioannis Chatzigiannakis and Piotr Indyk and Fabian Kuhn and Anca Muscholl},
  publisher =	{Schloss Dagstuhl--Leibniz-Zentrum fuer Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{http://drops.dagstuhl.de/opus/volltexte/2017/7475},
  URN =		{urn:nbn:de:0030-drops-74757},
  doi =		{10.4230/LIPIcs.ICALP.2017.134},
  annote =	{Keywords: Complements, Pricing, Networks, Game Theory, Price of Stability}
}

Keywords: Complements, Pricing, Networks, Game Theory, Price of Stability
Collection: 44th International Colloquium on Automata, Languages, and Programming (ICALP 2017)
Issue Date: 2017
Date of publication: 07.07.2017

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