Dominance and Competitive Bundling

• 成果类型: Article
• 署名作者: Hurkens, Sjaak; Jeon, Doh-Shin; Menicucci, Domenico
• 署名单位: Consejo Superior de Investigaciones Cientificas (CSIC); CSIC - Institut d'Analisi Economica (IAE); Autonomous University of Barcelona; Autonomous University of Barcelona; Barcelona School of Economics; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; University of Florence
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20170131
• 发表日期: 2019
• 页码: 1-33
• 关键词: compatibility; match; mix

摘要

We study how bundling affects competition between two asymmetric multi-product firms. One firm dominates the other in that it produces better products more efficiently. For low (high) levels of dominance, bundling intensifies (relaxes) price competition and lowers (raises) both firms' profits. For intermediate dominance levels, bundling increases the dominant firm's market share substantially, thereby raising its profit while reducing its rival's profit. Hence, the threat to bundle is then a credible foreclosure strategy. We also identify circumstances in which a firm that dominates only in some markets can profitably leverage its dominance to other markets by tying all its products.