AbstractIn this paper, we look at the case for bundling in an oligopolistic environment. We show that bundling is a particularly effective entry-deterrent strategy. A company that has market power in two goods, A and B, can, by bundling them together, make it harder for a rival with only one of these goods to enter the market. Bundling allows an incumbent to defend both products without having to price low in each. The traditional explanation for bundling that economists have given is that it serves as an effective tool of price discrimination by a monopolist. Although price discrimination provides
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm126.
Date of creation: 01 Nov 1999
Date of revision: 01 Dec 2000
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