EconPapers    
Economics at your fingertips  
 

Anticompetitive Bundling when Buyers Compete

Alexandre De Cornière and Greg Taylor
Additional contact information
Alexandre De Cornière: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Greg Taylor: University of Oxford

Post-Print from HAL

Abstract: We study the profitability of bundling by an upstream firm that licenses technologies to downstream competitors, and that faces competition for one of its technologies. In an otherwise standard "Chicago-style" model, the existence of downstream competition can make inefficient bundling profitable. Forcing downstream firms to use an inefficient technology reassures each one that it will face weak competition. This allows the upstream firm to extract more profit through its monopolized technology. A similar logic can make it profitable to degrade interoperability with rival technologies, even without foreclosing competition. Bundling is most profitable when downstream competition is intense and technologies complementary.

Date: 2024-02
References: Add references at CitEc
Citations:

Published in American Economic Journal: Microeconomics, 2024, 16 (1), pp.293-328. ⟨10.1257/mic.20230051⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:hal:journl:hal-04547843

DOI: 10.1257/mic.20230051

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2025-03-19
Handle: RePEc:hal:journl:hal-04547843