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Seminarios académicos y conferencias

Enrique Ide, Stanford GSB

Bundled Discounts and Monopolization in Wholesale Markets

Coautor: Juan-Pablo Montero

9 Agosto 2016 - 17 hrs.

Sala 209, Facultad de Ciencias Económicas y Administrativas UC

Ver investigación

Can a multi-product firm use bundled discounts to extend its market power into an adjacent market? The degree of downstream competition is key. Bundled discounts can be used for anticompetitive purposes only when buyers are disorganized and their valuations heterogeneous, which holds when suppliers sell directly to final consumers or indirectly through competing retailers. Under intense downstream competition, bundled discounts force retailers to carry the full range of products to make a sale, even though there are no shopping costs and final consumers’ demands are independent. Bundled discounts can then be used either as foreclose device, or alternatively, as an exploitative device that allows the multi-product firm to obtain monopoly profits in all markets.