An Analysis of Bundle Pricing: The Case of the Corn Seed Market
The paper investigates bundle pricing under imperfect competition. In a multiproduct context, the substitution/complementarity relationships among products can affect pricing in complex ways. This is used to motivate multi-product generalizations of the Herfindahl-Hirschmann index, which capture cross-market effects of imperfect competition on bundle pricing. Applied to the US corn seed market, the analysis investigates the pricing of conventional seeds and patented biotech seeds. For bundled biotech seeds, it finds strong evidence of sub-additive bundle pricing, thus rejecting standard component pricing. The econometric results document how increases in traditional and cross-market measures of imperfect competition contribute to higher seed prices.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||Sep 2008|
|Contact details of provider:|| Postal: 427 Lorch Street, Madison, WI 53706-1503|
Web page: http://www.aae.wisc.edu/pubs/sps/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hanming Fang & Peter Norman, 2003.
"To Bundle or Not to Bundle,"
Cowles Foundation Discussion Papers
1440, Cowles Foundation for Research in Economics, Yale University.
- Kleibergen, F.R. & Paap, R., 2003.
"Generalized Reduced Rank Tests using the Singular Value Decomposition,"
Econometric Institute Research Papers
EI 2003-01, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
- Frank Kleibergen & Richard Paap, 2003. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Tinbergen Institute Discussion Papers 03-003/4, Tinbergen Institute.
- Richard Paap & Frank Kleibergen, 2004. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Econometric Society 2004 Australasian Meetings 195, Econometric Society.
- Schmalensee, Richard., 1980.
"Output and welfare implications of monopolistic third-degree price discrimination,"
1095-80., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Schmalensee, Richard, 1981. "Output and Welfare Implications of Monopolistic Third-Degree Price Discrimination," American Economic Review, American Economic Association, vol. 71(1), pages 242-247, March.
- John Shea, 1996.
"Instrument Relevance in Multivariate Linear Models: A Simple Measure,"
NBER Technical Working Papers
0193, National Bureau of Economic Research, Inc.
- John Shea, 1997. "Instrument Relevance in Multivariate Linear Models: A Simple Measure," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 348-352, May.
- R. Venkatesh & Wagner Kamakura, 2003. "Optimal Bundling and Pricing under a Monopoly: Contrasting Complements and Substitutes from Independently Valued Products," The Journal of Business, University of Chicago Press, vol. 76(2), pages 211-232, April.
- Dennis W. Carlton & Michael Waldman, 2002.
"The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries,"
RAND Journal of Economics,
The RAND Corporation, vol. 33(2), pages 194-220, Summer.
- Dennis W. Carlton & Michael Waldman, 1998. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," NBER Working Papers 6831, National Bureau of Economic Research, Inc.
- Dennis W. Carlton & Michael Waldman, 1998. "The Strategic Use Of Tying To Preserve And Create Market Power In Evolving Industries," University of Chicago - George G. Stigler Center for Study of Economy and State 145, Chicago - Center for Study of Economy and State.
- Gregory D. Graff & Gordon C. Rausser & Arthur A. Small, 2003.
"Agricultural Biotechnology's Complementary Intellectual Assets,"
The Review of Economics and Statistics,
MIT Press, vol. 85(2), pages 349-363, May.
- Graff, Gregory D. & Rausser, Gordon C. & Small, Arthur Adams, 2001. "Agricultural biotechnology's complementary intellectual assets," CUDARE Working Paper Series 925, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
- 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.
- repec:rje:randje:v:37:y:2006:i:4:p:946-963 is not listed on IDEAS
- Holmes, Thomas J, 1989. "The Effects of Third-Degree Price Discrimination in Oligopoly," American Economic Review, American Economic Association, vol. 79(1), pages 244-250, March.
- Schmalensee, Richard, 1984. "Gaussian Demand and Commodity Bundling," The Journal of Business, University of Chicago Press, vol. 57(1), pages S211-30, January.
- Armstrong, Mark & Vickers, John, 2001. "Competitive Price Discrimination," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 579-605, Winter.
- Chenghuan Sean Chu & Phillip Leslie & Alan Sorensen, 2008.
"Nearly Optimal Pricing for Multiproduct Firms,"
NBER Working Papers
13916, National Bureau of Economic Research, Inc.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Kenneth S. Corts, 1998. "Third-Degree Price Discrimination in Oligopoly: All-Out Competition and Strategic Commitment," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 306-323, Summer.
- Barry Nalebuff, 2004. "Bundling as an Entry Barrier," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 159-187.
- Michael D. Whinston, 2008. "Lectures on Antitrust Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731878.
When requesting a correction, please mention this item's handle: RePEc:ecl:wisagr:529. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.