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| Content Provider | Springer Nature Link |
|---|---|
| Author | Chung, Hui Ling Lin, Yan Shu Hu, Jin Li |
| Copyright Year | 2012 |
| Abstract | The existing literature shows that a decrease in the degree of substitutability increases a monopoly’s incentive to bundle. This paper in addition takes into account competition in the second product market and then re-examines how intra-brand and inter-brand product differentiations affect the incentive to bundle. In order to formally examine the above conjectures, this research builds up a two-firm, two-product model in which product 1 (monopoly product) is produced only by the bundling firm and product 2 (competing product) is produced by both firms. The analysis shows that under both Bertrand and Cournot competitions the incentive to bundle does not necessarily increase with the degree of intra-brand differentiation, while it strictly decreases with the degree of inter-brand differentiation. Moreover, under Bertrand competition bundling always decreases consumer surplus, but may increase the competitor’s profit and social surplus. Under Cournot competition bundling always reduces the opponent’s profit and social welfare, but may increase consumer surplus. |
| Starting Page | 207 |
| Ending Page | 229 |
| Page Count | 23 |
| File Format | |
| ISSN | 09318658 |
| Journal | Journal of Economics |
| Volume Number | 108 |
| Issue Number | 3 |
| e-ISSN | 16177134 |
| Language | English |
| Publisher | Springer Vienna |
| Publisher Date | 2012-02-14 |
| Publisher Place | Vienna |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Bundling strategy Intra-brand differentiation Inter-brand differentiation Economics general Economic Theory International Economics Microeconomics R & D/Technology Policy |
| Content Type | Text |
| Resource Type | Article |
| Subject | Economics and Econometrics Business, Management and Accounting |
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