Dominance and Competitive Bundling

Hurkens, Sjaak, Jeon, Doh-Shin and Menicucci, Domenico (2013) Dominance and Competitive Bundling. TSE Working Paper, n. 13-423, Toulouse

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Official URL: http://tse-fr.eu/pub/27441

Abstract

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.

Item Type: Monograph (Working Paper)
Language: English
Date: 13 August 2013
Place of Publication: Toulouse
JEL Classification: D43 - Oligopoly and Other Forms of Market Imperfection
L13 - Oligopoly and Other Imperfect Markets
L41 - Monopolization; Horizontal Anticompetitive Practices
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 09 Jul 2014 17:37
Last Modified: 27 Aug 2018 12:56
["eprint_fieldname_oai_identifier" not defined]: oai:tse-fr.eu:27441
URI: http://publications.ut-capitole.fr/id/eprint/15699

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