Input Price Discrimination with Bundling

Qing Hu (), Ryo Masuyama and Tomomichi Mizuno ()
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Qing Hu: Kansai University
Tomomichi Mizuno: Kobe University

No 2610, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: This paper examines how bundling affects the welfare comparison between input price discrimination (IPD) and uniform input pricing (UIP) in a vertical market structure with Cournot competition. A multi-product firm bundles its products across a competitive market and a monopoly market, while an upstream supplier provides inputs only to the competitive market. When the inefficient firm is the bundling firm, IPD can increase total surplus relative to UIP if the monopoly market is sufficiently small. When the efficient firm is the bundling firm, however, IPD always reduces both consumer and total surpluses.

Keywords: input; price; discriminationï¼›; uniform; input; priceï¼›; bundlingï¼›; vertical; relationship (search for similar items in EconPapers)
JEL-codes: D43 L10 L13 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2026-07
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