Dominance and Competitive Bundling

Sjaak Hurkens, Doh-Shin Jeon and Domenico Menicucci

No 790, IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse

Abstract: We study bundling by a dominant multi-product firm facing competition from a rival multi-product firm. Compared to competition under independent pricing, competition under pure bundling reduces (increases) each firm's profit for low (high) levels of dominance, while for intermediate levels of dominance, it increases the dominant firm's profit but reduces the rival's profit. The latter result provides a justification for the use of contractual bundling to build entry barrier. When we allow for mixed bundling, we find a threshold level of dominance above which the unique outcome is the one under pure bundling.

JEL-codes: D43 L13 L41 (search for similar items in EconPapers)
Date: 2013-08, Revised 2018-05
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Dominance and Competitive Bundling (2019)
Working Paper: Dominance and Competitive Bundling (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ide:wpaper:27442

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