Fighting Bundles: The Effects of Competition on Second-Degree Price Discrimination

• 成果类型: Article
• 署名作者: Boik, Andre; Takahashi, Hidenori
• 署名单位: University of California System; University of California Davis; Hitotsubashi University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20180303
• 发表日期: 2020
• 页码: 156-187
• 关键词: Monopoly; dispersion; entry

摘要

We study how changes in market structure affect how firms engage in second-degree price discrimination. Specifically, we study how a large incumbent cable firm changes its menu of price-quality offerings and mixed bundles in response to entry Competition strongly decreases the rate at which prices increase in quality and induces the incumbent to introduce additional medium- to high-quality offerings that the incumbent could have introduced absent competition but chose not to. Our findings are relevant for the broadband industry because they suggest that competition can improve broadband quality through direct pricing effects without any changes in investment in maximum quality.