Mixed bundling in oligopoly markets

This paper proposes a framework for studying competitive mixed bundling with an arbitrary number of firms. We examine both a firm's incentive to introduce mixed bundling and equilibrium tariffs when all firms adopt the mixed-bundling strategy. In the duopoly case, relative to separate sales, mixed bundling has ambiguous impacts on prices, profit and consumer surplus; with many firms, however, mixed bundling typically lowers all prices, harms firms and benefits consumers. (c) 2021 Elsevier Inc. All rights reserved.

Automated summary

This paper proposes a framework for studying competitive mixed bundling with an arbitrary number of firms and finds that in a duopoly situation, mixed bundling has ambiguous impacts on prices, profits, and consumer surplus, while with many firms, mixed bundling typically lowers all prices, harms firms, and benefits consumers.