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Hurkens, Sjaak, Jeon, Doh-Shin
and Menicucci, Domenico
(2019)
Dominance and competitive bundling.
American Economic Journal: Microeconomics, vol. 11 (n° 3).
pp. 1-33.
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Abstract
We study how bundling affects competition between two asymmetric multi-product firms. One firm dominates the other in that it produces better products more efficiently. For low (high) levels of dominance, bundling intensifies (relaxes) price competition and lowers (raises) both firms’ profits. For intermediate dominance levels, bundling increases the dominant firm’s market share substantially, thereby raising its profit while reducing its rival’s profit. Hence, the threat to bundle is then a credible foreclosure strategy. We also identify circumstances in which a firm that dominates only in some markets can profitably leverage its dominance to other markets by tying all its products.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | August 2019 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Bundling Tying, Leverage, Dominance, Entry Barrier |
| 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) |
| Site: | UT1 |
| Date Deposited: | 08 Jun 2018 08:12 |
| Last Modified: | 10 Sep 2021 11:32 |
| OAI Identifier: | oai:tse-fr.eu:32712 |
| URI: | https://publications.ut-capitole.fr/id/eprint/26078 |
Available Versions of this Item
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Dominance and Competitive Bundling. (deposited 09 Jul 2014 17:37)
- Dominance and competitive bundling. (deposited 08 Jun 2018 08:12) [Currently Displayed]
