Mixed Bundling in Duopoly

Nicholas Economides ()

Working Papers from New York University, Leonard N. Stern School of Business, Department of Economics

Abstract: We present a model where producers of complementary goods have the option to practice mixed bundling. In the first stage of a two- stage game, firms choose between a mixed bundling and a non- bundling strategy. In the second stage, firms choose prices. We show that mixed bundling is a dominant strategy for both firms. However, when the composite goods are not very close substitutes, at the bundling-bundling equilibrium both firms are worse off than when they both commit not to practice mixed bundling.

Date: 1993-11
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Citations: View citations in EconPapers (18)

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