A More General Theory of Commodity Bundling

This paper discusses the incentive to bundle when consumer valuations are non-additive and/or when products are supplied by separate sellers. Whether integrated or separate, a firm has an incentive to introduce a bundle discount when demand for the bundle is more elastic than the overall demand for products. When separate sellers coordinate on a bundle discount, they can use the discount to relax competition, which can harm welfare.

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Year of publication:	2012-09-28
Authors:	Armstrong, Mark
Institutions:	Department of Economics, Oxford University
Subject:	Price discrimination \| Bundling \| Discrete choice \| Oligopoly \| Common agency

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Extent:	application/pdf
Series:	Economics Series Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 624
Classification:	D11 - Consumer Economics: Theory ; D43 - Oligopoly and Other Forms of Market Imperfection ; D82 - Asymmetric and Private Information ; D86 - Economics of Contract: Theory ; L13 - Oligopoly and Other Imperfect Markets ; L41 - Monopolization; Horizontal Anticompetitive Practices
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011004191