We discuss the welfare effects of bundling two products offered by two symmetric firms. We first show that, in terms of welfare, a monopoly does better than a duopoly in which each firm sell its good and that a monopoly selling the bundle does better than if it sells the bundle and the two goods...

A major issue within the realm of Antitrust policy is the regulation of existing monopolies. We describe a new potential indirect scheme for regulating a natural monopoly that arises from high entry cost. The approach involves minimal government intervention, and it is based on encouraging entry...