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Bundling, information aggregation and entry deterrence

Author

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  • Park, Jongchool
  • Seo, Kyoungwon

Abstract

This paper provides an explanation for bundling based on its information aggregation effect. Using bundling, the monopolist can hide the information of each monopoly market by aggregating information. We show that the monopolist chooses bundling in an early period because bundling removes potential competition in the following period.

Suggested Citation

  • Park, Jongchool & Seo, Kyoungwon, 2008. "Bundling, information aggregation and entry deterrence," Economics Letters, Elsevier, vol. 101(2), pages 100-102, November.
  • Handle: RePEc:eee:ecolet:v:101:y:2008:i:2:p:100-102
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    References listed on IDEAS

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    1. Whinston, Michael D, 1990. "Tying, Foreclosure, and Exclusion," American Economic Review, American Economic Association, vol. 80(4), pages 837-859, September.
    2. William James Adams & Janet L. Yellen, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 90(3), pages 475-498.
    3. Barry Nalebuff, 2004. "Bundling as an Entry Barrier," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 159-187.
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    Cited by:

    1. Ilona Bondos & Marcin Lipowski, 2016. "Service Packages Attractiveness Has Many Faces," Eurasian Journal of Business and Management, Eurasian Publications, vol. 4(1), pages 1-10.
    2. Egbert, Henrik & Greiff, Matthias & Xhangolli, Kreshnik, 2014. "PWYW Pricing ex post Consumption: A Sales Strategy for Experience Goods," MPRA Paper 53376, University Library of Munich, Germany.
    3. Arya, Anil & Mittendorf, Brian, 2013. "Discretionary disclosure in the presence of dual distribution channels," Journal of Accounting and Economics, Elsevier, vol. 55(2), pages 168-182.

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