EconPapers    
Economics at your fingertips  
 

On the profitability of interfirm bundling in oligopolies

Sang-Hyun Kim and Jong‐Hee Hahn

Journal of Economics & Management Strategy, 2022, vol. 31, issue 3, 657-673

Abstract: This paper examines the profitability of interfirm bundling among independent single‐good producers in a two‐dimensional Hotelling framework. We show that interfirm bundling tends to relax price competition by preventing consumers from mixing and matching (i.e., making it difficult to switch brands) and therefore is more profitable than separate sales, provided that firms are sufficiently symmetric. Hence, firms have mutual incentives to offer their products as a bundle or to make exclusive dealing arrangements. This result sheds new light on the competitive effect of bundling in oligopolies that have been neglected in the literature.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/jems.12476

Related works:
Working Paper: On the Profitability of Interfirm Bundling in Oligopolies (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:31:y:2022:i:3:p:657-673

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1

Access Statistics for this article

More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2024-02-18
Handle: RePEc:bla:jemstr:v:31:y:2022:i:3:p:657-673