The strategic interplay between bundling and merging in complementary markets

Andrea Mantovani and J. Vandekerckhove

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: In this paper, two pairs of complementors have to decide whether to merge and eventually bundle their products. Depending on the degree of competitive pressure in the market, either both pairs decide to merge (with or without bundling), or only one pair merges and bundles, while rivals remain independent. The latter case can very harmful for consumers as it brings surge in prices. We also consider the case in which one pair moves first. Interestingly, we find a parametric region where first movers merge but refrain from bundling, to not induce rivals to merge as well.

JEL-codes: D43 L13 L41 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-bec, nep-com, nep-ipr, nep-pr~ and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Strategic Interplay Between Bundling and Merging in Complementary Markets (2016)
Working Paper: The strategic interplay between bundling and merging in complementary markets (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp814

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