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On the private and social desirability of mixed bundling in complementary markets with cost savings

Author

Listed:
  • Christine Halmenschlager

    (CRED - Centre de Recherche en Economie et Droit - UP2 - Université Panthéon-Assas)

  • Andrea Mantovani

    (UNIBO - Alma Mater Studiorum Università di Bologna = University of Bologna)

Abstract

The aim of this paper is to study both the private and the social desirability of a mixed bundling strategy that generates a cost savings effect. We confirm that mixed bundling is the dominant strategy for multiproduct firms, although it may give rise to a prisoner s dilemma. Moreover, we show that mixed bundling may maximise social welfare, provided that cost savings are sufficiently high. Finally, we highlight the parametric regions where the social and the private interests coincide, and those where they do not. The recent evolution of broadband telecommunications services provides an ideal framework to apply our theoretical predictions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Christine Halmenschlager & Andrea Mantovani, 2017. "On the private and social desirability of mixed bundling in complementary markets with cost savings," Post-Print hal-04134732, HAL.
    • Handle: RePEc:hal:journl:hal-04134732
    DOI: 10.1016/j.infoecopol.2017.04.002
    as

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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