Economics

Anil Caliskan, David Porter, Stephen Rassenti, Vernon L. Smith, Bart J. Wilson

Exclusionary Bundling and the Effects of a Competitive Fringe

Volume 163 () / Issue 1, pp. 109-132 (24)

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The traditional analysis of exclusionary bundling examines the impact of a monopolist bundling product A with another product B, which is competitively provided. Using experimental posted-offer markets, we investigate the exclusionary and welfare implications of having a fringe competitor in the A market. We find that the fringe seller increases the consumer surplus while decreasing the seller surplus and that the fringe seller does not affect the consumer surplus extracted from the bundle despite a decrease in the bundle transaction price. The consumer surplus gains generated by the fringe seller erode if the dominant seller has a lower average cost.
Authors/Editors

Anil Caliskan No current data available.

David Porter No current data available.

Stephen Rassenti No current data available.

Vernon L. Smith No current data available.

Bart J. Wilson No current data available.