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Indiana University Bloomington

Operations & Decision Technologies

Kelley Advantage

Our Operations, Analytics and Information Systems faculty have written many of the definitive textbooks in the areas of operations, data analysis, database management, networking, and Excel modeling.

Recent Publications

Journal Articles

Seeking Closure: Competition in Complementary Markets

2009, Decision Sciences

Kyle Cattani, H. S. Heese


When offering a product that has a complementary product in a different market, a firm must consider the interdependence between the complementary products as well as the competition within markets. If the firm participates in both markets, the balancing act becomes even more challenging. This article provides insights about strategies in this latter setting: when should the firm seek to keep its products closed to competing complementary products, and when would the firm be better off by accepting a common standard? To address these questions, we employ standard game theoretic analysis to a simple spatial model that captures aspects of both intermarket externalities and intramarket competition. We find that if a firm participates in both markets and chooses a closed standard, it achieves lower profits compared to an open standard, but gains greater market share. Surprisingly, we find that customers are better off when standards are kept closed.


Cattani, K. and S. Heese (2009), “Seeking Closure: Competition in Complementary Markets,” Decision Sciences, Vol. 40, No. 4.