Tying, Bundling, and Loyalty/Requirement Rebates

Nicholas Economides ()

No 10-26, Working Papers from NET Institute

Abstract: I discuss the impact of tying, bundling, and loyalty/requirement rebates on consumer surplus in the affected markets. I show that the Chicago School Theory of a single monopoly surplus that justifies tying, bundling, and loyalty/requirement rebates on the basis of efficiency typically fails. Thus, tying, bundling, and loyalty/requirement rebates can be used to extract consumer surplus and enhance profit of firms with market power. I discuss the various setups when this occurs.

Keywords: tying; ties; bundling; bundled rebates; loyalty discounts; loyalty requirement rebates; single monopoly surplus; monopolization; market power; foreclosure; antitrust (search for similar items in EconPapers)
JEL-codes: C72 D42 D43 K21 L12 L40 L41 L42 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-12
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
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Downloads: (external link)
http://www.stern.nyu.edu/networks/Economides_Tying ... uirement_Rebates.pdf (application/pdf)
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Related works:
Chapter: Tying, Bundling, and Loyalty/Requirement Rebates (2012)
Working Paper: Tying, Bundling, and Loyalty/Requirement Rebates (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:1026

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