Strategic and Welfare Implications of Bundling

Stephen Martin ()

No 1998-14, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: A standard oligopoly model of bundling shows that bundling by a firm with a monopoly over one product has a strategic effect because it changes the substitution relationships between the goods among which consumers choose. Bundling in appropriate proportions is privately profitable, reduces rivals´ profits and overall welfare, and may drive rivals from the market.

Keywords: bundling; tying (search for similar items in EconPapers)
JEL-codes: L12 L13 L41 (search for similar items in EconPapers)
Pages: 7 pages
Date: 1998-09
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Published in: Economics Letters. March 1999, 62(3) pp 371-76

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Journal Article: Strategic and welfare implications of bundling (1999)
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