The strategic interplay between bundling and merging in complementary markets

Andrea Mantovani and Jan Vandekerckhove ()
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Jan Vandekerckhove: Maastricht University

No 2012/10, Working Papers from Institut d'Economia de Barcelona (IEB)

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.

Keywords: Bundling; merger; strategic interaction; antitrust (search for similar items in EconPapers)
JEL-codes: D43 L13 L41 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012
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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:ieb:wpaper:doc2012-10

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