Bundling and Competition for Slots: Sequential Pricing

Jeon, Doh-Shin and Menicucci, Domenico (2009) Bundling and Competition for Slots: Sequential Pricing. TSE Working Paper, n. 09-074

[img]
Preview
Text
Download (486kB) | Preview
Official URL: http://tse-fr.eu/pub/21962

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.

Item Type: Monograph (Working Paper)
Language: English
Date: August 2009
JEL codes: D4 - Market Structure and Pricing
K21 - Antitrust Law
L13 - Oligopoly and Other Imperfect Markets
L41 - Monopolization; Horizontal Anticompetitive Practices
L82 - Entertainment; Media (Performing Arts, Visual Arts, Broadcasting, Publishing, etc.)
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Jan 2012 06:01
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:21962
URI: http://publications.ut-capitole.fr/id/eprint/3324

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year