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Author Goldfain, Ekaterina ♦ Rey, Patrick ♦ Riedel, Frank ♦ Schmidt, Robert ♦ Steiner, Jakub
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Entry Deterrence ♦ Dominant Position ♦ Consumer Preference ♦ Multi-product Firm ♦ Competition Policy ♦ Entry Deterrence Tool ♦ Com-plementary Good ♦ Monopoly Position
Abstract This paper analyzes tying and bundling as entry deterrence tools. It shows that a multi-product firm can defend its monopoly position in one market via mixed bundling even without having a dominant position in another market. Such a strategy, however, leads to welfare losses and cannot be prevented by cooperation or a merger among rivals. This is shown in a model with two com-plementary goods. Each of the goods is vertically differentiated and consumers’ preferences for them are positively correlated. In addition, some implications for competition policy are discussed.
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Learning Resource Type Article
Publisher Date 2006-01-01