EconPapers    
Economics at your fingertips  
 

Bundling and Competition for Slots: Sequential Pricing

Doh-Shin Jeon and Domenico Menicucci

No 09-074, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: In this paper we study, as in Jeon-Menicucci (2009), competition between sellers when each of them sells a portfolio of distinct products to a buyer having limited slots. This paper considers sequential pricing and complements our main paper (Jeon- Menicucci, 2009) that considers simultaneous pricing. First, Jeon-Menicucci (2009) find that under simultaneous individual pricing, equilibrium often does not exist and hence the outcome is often inefficient. By contrast, equilibrium always exists under sequential individual pricing and we characterize it in this paper. We find that each seller faces a trade-off between the number of slots he occupies and surplus extraction per product, and there is no particular reason that this leads to an efficient allocation of slots. Second, Jeon Menicucci (2009) find that when bundling is allowed, there always exists an efficient equilibrium but inefficient equilibria can also exist due to pure bundling (for physical products) or slotting contracts. Under sequential pricing, we find that all equilibria are efficient regardless of whether firms can use slotting contracts, and both for digital goods and for physical goods. Therefore, sequential pricing presents an even stronger case for laissez-faire in the matter of bundling than simultaneous pricing.

JEL-codes: D4 K21 L13 L41 L82 (search for similar items in EconPapers)
Date: 2009-08
New Economics Papers: this item is included in nep-com and nep-ind
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.tse-fr.eu/sites/default/files/medias/doc/wp/io/wp_io_74_2009.pdf Full text (application/pdf)

Related works:
Working Paper: Bundling and Competition for Slots: Sequential Pricing (2009) Downloads
Working Paper: Bundling and competition for slots: Sequential pricing (2009) 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:tse:wpaper:21962

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by (com@tse-fr.eu).

 
Page updated 2025-01-19
Handle: RePEc:tse:wpaper:21962