Bundling and the GE-Honeywell Merger
AbstractThe economic theory of bundling has moved from the classroom and academic journals to the public policy arena. Its debut was dramatic. On July 3, 2001, the European Commission blocked the $42 billion merger between GE and Honeywell. A primary reason for their objection to this combination was a concern over bundling. This paper uses the context of the proposed GE-Honeywell merger to address the concerns raised by bundling. We set out the theory as put forth by the Commission and try to reconcile this theory with both the economic theory of bundling and the facts of the case. We discuss what is meant by bundling and explain when it is a potential problem and when it is not. Based on this understanding, we propose anti-trust policy recommendations to deal with the novel issues raised by bundling.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm303.
Date of creation: 05 Sep 2002
Date of revision:
Bundling; Antitrust; EU; GE; Honeywell;
Find related papers by JEL classification:
- D4 - Microeconomics - - Market Structure and Pricing
- K0 - Law and Economics - - General
- L4 - Industrial Organization - - Antitrust Issues and Policies
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
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