Bundling and competition for slots: On the portfolio effects of bundling

Doh-Shin Jeon and Domenico Menicucci

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

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.

Keywords: Bundling; Portfolios; Slots (or Shelf Space); Pure Bundling; Slotting Contracts; Exclusive Dealing; Foreclosure (search for similar items in EconPapers)
JEL-codes: D4 K21 L13 L41 L82 (search for similar items in EconPapers)
Date: 2009-02, Revised 2009-07
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Bundling and Competition for Slots: On the Portfolio Effects of Bundling (2011)
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:upf:upfgen:1152

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