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Bundling, information aggregation and entry deterrence

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  • Park, Jongchool
  • Seo, Kyoungwon

Abstract

This paper provides an explanation for bundling based on its information aggregation effect. Using bundling, the monopolist can hide the information of each monopoly market by aggregating information. We show that the monopolist chooses bundling in an early period because bundling removes potential competition in the following period.

Suggested Citation

  • Park, Jongchool & Seo, Kyoungwon, 2008. "Bundling, information aggregation and entry deterrence," Economics Letters, Elsevier, vol. 101(2), pages 100-102, November.
    • Handle: RePEc:eee:ecolet:v:101:y:2008:i:2:p:100-102
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    References listed on IDEAS

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    1. Whinston, Michael D, 1990. "Tying, Foreclosure, and Exclusion," American Economic Review, American Economic Association, vol. 80(4), pages 837-859, September.
    2. William James Adams & Janet L. Yellen, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(3), pages 475-498.
    3. Barry Nalebuff, 2004. "Bundling as an Entry Barrier," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 159-187.
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    Cited by:

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    2. Egbert, Henrik & Greiff, Matthias & Xhangolli, Kreshnik, 2014. "PWYW Pricing ex post Consumption: A Sales Strategy for Experience Goods," MPRA Paper 53376, University Library of Munich, Germany.
    3. Arya, Anil & Mittendorf, Brian, 2013. "Discretionary disclosure in the presence of dual distribution channels," Journal of Accounting and Economics, Elsevier, vol. 55(2), pages 168-182.
    4. Du, Shaofu & Peng, Jing & Nie, Tengfei & Yu, Yugang, 2020. "Pricing strategies and mechanism choice in reward-based crowdfunding," European Journal of Operational Research, Elsevier, vol. 284(3), pages 951-966.

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