Dominance and Competitive Bundling
Doh-Shin Jeon and
No 13-423, TSE Working Papers from Toulouse School of Economics (TSE)
We study bundling by a dominant multi-product firm facing competition from a rival multi-product firm. Compared to competition under independent pricing, competition under pure bundling reduces (increases) each firm's profit for low (high) levels of dominance, while for intermediate levels of dominance, it increases the dominant firm's profit but reduces the rival's profit. The latter result provides a justification for the use of contractual bundling to build entry barrier. When we allow for mixed bundling, we find a threshold level of dominance above which the unique outcome is the one under pure bundling.
JEL-codes: D43 L13 L41 (search for similar items in EconPapers)
Date: 2013-08, Revised 2018-05
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Journal Article: Dominance and Competitive Bundling (2019)
Working Paper: Dominance and Competitive Bundling (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:27441
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