Bundling and Line Extensions in Distribution Channels

• 成果类型: Article
• 署名作者: Inderst, Roman; Griem, Fabian; Shaffer, Greg
• 署名单位: Goethe University Frankfurt
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.01326
• 发表日期: 2025
• 页码: 6184-6203
• 关键词: Pricing; Distribution channels; bundling; Tying; product line

摘要

We show how manufacturers can benefit from contracts that incentivize retailers to purchase multiple products from the same manufacturer. We isolate two effects: first, under standard contractual inefficiencies, which give rise to double marginalization, such contracts can increase channel profits (the improved contractual efficiency effect); second, when a weaker product is tied to a particularly strong must-stock product, such contracts can also reduce a retailer's position and shift rent to the manufacturer (the increased rent extraction effect). To harness these effects, we show that it can even be profitable for the manufacturer to introduce a weak product that ultimately has the effect of foreclosing a rival's more efficient substitute. Nevertheless, unless the tying product is sufficiently strong, the overall effect on welfare can still be positive, providing manufacturers with an efficiency rationale to use against common concerns held by antitrust agencies about such practices.