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In economics and game theory, the decisions of two or more players are called strategic complements if they mutually reinforce one another, and they are called strategic substitutes if they mutually offset one another. These terms were originally coined by Bulow, Geanakoplos, and Klemperer (1985).
Offsets can be defined as provisions to an import agreement, between an exporting foreign company, or possibly a government acting as intermediary, and an importing public entity, that oblige the exporter to undertake activities in order to satisfy a second objective of the importing entity, distinct from the acquisition of the goods and/or services that form the core transaction.
Gibson's paradox is the observation that the rate of interest and the general level of prices under the gold standard [1] are positively correlated. [2] It is named for British economist Alfred Herbert Gibson who noted the correlation in a 1923 article for Banker's Magazine.
I.e., the definition includes both substitute goods and independent goods, and only rules out complementary goods. See Gross substitutes (indivisible items) . References
In economics, a complementary good is a good whose appeal increases with the popularity of its complement. [ further explanation needed ] Technically, it displays a negative cross elasticity of demand and that demand for it increases when the price of another good decreases. [ 1 ]
An offset strategy consequently seeks to deliberately change an unattractive competition to one more advantageous for the implementer. In this way, an offset strategy is a type of competitive strategy that seeks to maintain advantage over potential adversaries over long periods of time while preserving peace where possible.
A complementary monopoly is an economic concept. It considers a situation where consent must be obtained from more than one agent to obtain a good. In turn leading to a reduction in surplus generated relative to an outright monopoly, if the two agents do not cooperate.
The shift in consumer demand for an inferior good can be explained by two natural economic phenomena: The substitution effect and the income effect. These effects describe and validate the movement of the demand curve in (independent) response to increasing income and relative cost of other goods.