On the private and social desirability of mixed bundling in complementary markets with cost savings

Christine Halmenschlager () and Andrea Mantovani
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Christine Halmenschlager: CRED, Université Panthéon-Assas Paris II

No 2016/6, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: The aim of this paper is to study both the private and the social desirability of a mixed bundling strategy that generates a cost savings effect. We confirm that mixed bundling is the dominant strategy for multiproduct firms, although it may give rise to a prisoner’s dilemma. Moreover, we show that mixed bundling may maximise social welfare, provided that cost savings are sufficiently high. Finally, we highlight the parametric regions where the social and the private interests coincide, and those where they do not. The recent evolution of broadband telecommunications services provides an ideal framework to apply our theoretical predictions.

Keywords: Regulation; firm performance; telecommunications; multinational firms (search for similar items in EconPapers)
JEL-codes: F23 L25 L51 L96 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2016
New Economics Papers: this item is included in nep-com and nep-mic
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Related works:
Journal Article: On the private and social desirability of mixed bundling in complementary markets with cost savings (2017)
Working Paper: On the private and social desirability of mixed bundling in complementary markets with cost savings (2017)
Working Paper: On the private and social desirability of mixed bundling in complementary markets with cost savings (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2016-6

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