Bundling and Competition for Slots: On the Portfolio Effects of Bundling

Doh-Shin Jeon and Domenico Menicucci

No 09-069, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We consider competition among sellers when each of them sells a portfolio of distinct products to a buyer having limited slots. We study how bundling affects competition for slots. Under independent pricing, equilibrium often does not exist and hence the outcome is often inefficient. When bundling is allowed, each seller has an incentive to bundle his products and an efficient equilibrium always exists. Furthermore, in the case of digital goods, all equilibria are efficient if slotting contracts are prohibited. We also identify portfolio effects of bundling and analyze the consequences on horizontal mergers. Finally, we derive clear-cut policy implications.

JEL-codes: D4 K21 L13 L41 L82 (search for similar items in EconPapers)
Date: 2009-07, Revised 2011-07
New Economics Papers: this item is included in nep-com and nep-ind
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Bundling and Competition for Slots: On the Portfolio Effects of Bundling (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:21960

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