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Bundling, tying, and collusion

Author

Listed:
  • David Spector

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Tying a good produced monopolistically with a complementary good produced in an oligopolistic market in which there is room for collusion can be profitable if some buyers of the oligopoly good have no demand for the monopoly good. The reason is that a tie makes part of the demand in the oligopolistic market out of the reach of the tying firm's rivals, which decreases the profitability of deviating from a collusive agreement. Tying may thus facilitate collusion. It may also allow the tying firm to alter market share allocation in a collusive oligopolistic market.

Suggested Citation

  • David Spector, 2007. "Bundling, tying, and collusion," Post-Print halshs-00754225, HAL.
    • Handle: RePEc:hal:journl:halshs-00754225
    DOI: 10.1016/j.ijindorg.2006.06.003
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    Cited by:

    1. Mohammad Arzaghi & Ernst R. Berndt & James C. Davis & Alvin J. Silk, 2008. "Economic Factors Underlying the Unbundling of Advertising Agency Services," NBER Working Papers 14345, National Bureau of Economic Research, Inc.
    2. Angelika Endres & Joachim Heinzel, 2019. "The Impact of Product Qualities on Downstream Bundling in a Distribution Channel," Working Papers CIE 127, Paderborn University, CIE Center for International Economics.
    3. David Gill & John Thanassoulis, 2016. "Competition in Posted Prices with Stochastic Discounts," Economic Journal, Royal Economic Society, vol. 126(594), pages 1528-1570, August.
    4. Angelika Endres & Joachim Heinzel, 2019. "The Impact of Product Qualities on Downstream Bundling in a Distribution Channel," Working Papers CIE 124, Paderborn University, CIE Center for International Economics.
    5. Edmond Baranes, 2006. "Bundling and Collusion on Communications Markets," Working Papers 06-17, NET Institute, revised Oct 2006.
    6. David Gill & John Thanassoulis, 2013. "Competition in Posted Prices With Bargaining," Economics Series Working Papers 639, University of Oxford, Department of Economics.
    7. Jong-Hee Hahn & Sang-Hyun Kim, 2016. "Interfirm Bundled Discounts as a Collusive Device," Journal of Industrial Economics, Wiley Blackwell, vol. 64(2), pages 255-276, June.
    8. Juan-Pablo Montero & Esperanza Johnson, 2012. "Multimarket Contact, Bundling and Collusive Behavior," Documentos de Trabajo 420, Instituto de Economia. Pontificia Universidad Católica de Chile..
    9. Baranes, Edmond & Podesta, Marion & Poudou, Jean-Christophe, 2016. "Mixed bundling may hinder collusion," Research in Economics, Elsevier, vol. 70(4), pages 638-658.
    10. Begoña García-Mariñoso & Xavier Martinez-Giralt & Pau Olivella, 2008. "Bundling in Telecommunications," UFAE and IAE Working Papers 762.08, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    11. Yuri Park & Hyunnam Kim & Jongsu Lee, 2009. "Model for Studying Commodity Bundling with a Focus on Consumer Preference," TEMEP Discussion Papers 200935, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2009.
    12. Okoeguale, Kevin I. & Loveland, Robert, 2017. "Telecommunications deregulation and the motives for mergers," Journal of Economics and Business, Elsevier, vol. 94(C), pages 15-31.

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