Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 2017, Volume 85, Issue 1

Competitive Bundling
p. 145-172

Jidong Zhou

This paper proposes a framework for studying competitive (pure) bundling in an oligopoly market. We find that under fairly general conditions, relative to separate sales, bundling raises market prices, benefits firms, and harms consumers when the number of firms is above a threshold (which can be small). This is in contrast to the findings in the duopoly case on which the existing literature often focuses. Our analysis also sheds new light on how consumer valuation dispersion affects price competition more generally.

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