Strategic and Welfare Implications of Bundling
A standard oligopoly model of bundling shows that bundling by a firm with a monopoly over one product has a strategic effect because it changes the substitution relationships between the goods among which consumers choose. Bundling in appropriate proportions is privately profitable, reduces rivals´ profits and overall welfare, and may drive rivals from the market.
|Date of creation:||Sep 1998|
|Publication status:||Published in: Economics Letters. March 1999, 62(3) pp 371-76|
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