The strategic effect of bundling: a new perspective

Mantovani, Andrea (2010) The strategic effect of bundling: a new perspective. Bologna: Dipartimento di Scienze economiche DSE, p. 34. DOI 10.6092/unibo/amsacta/4536. In: Quaderni - Working Paper DSE (705). ISSN 2282-6483.
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Abstract

This paper investigates the strategic effect of bundling when a multi-product firm producing two complements faces competition in both markets. I consider a demand structure where both Cournot and Bertrand competition can be evaluated. Bundling is completely ineffective when firms compete in quantities. On the contrary, under Bertrand competition, selling the two goods in a package is profitable when the goods produced by the rivals are perceived as close substitutes to those produced by the multi-product firm. Bundling drives prices up, and not only consumer surplus, but also social welfare shrinks, thus calling for the intervention of the antitrust agency.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Mantovani, Andrea
Keywords
Bundling, Oligopoly, Bertrand competition, Social Welfare
Subjects
ISSN
2282-6483
DOI
Deposit date
04 Feb 2016 09:12
Last modified
04 Feb 2016 09:12
URI

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