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Mixed bundling may hinder collusion

Author

Listed:
  • Edmond Baranes

    (CREDEN - Centre de Recherche en Economie et Droit de l'ENergie - UM1 - Université Montpellier 1, Labex Entreprendre - UM - Université de Montpellier)

  • Marion Podesta

    (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)

  • Jean-Christophe Poudou

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, Labex Entreprendre - UM - Université de Montpellier)

Abstract

We study the incentives to collude when firms use mixed bundling or independent pricing strategies for the sale of two components of a composite good. The main finding is that collusion is less sustainable under mixed bundling, because this increases the profitability of deviations from the collusive path. The result is robust to extensions with an endogenous choice of the mode of competition (with bundling or independent pricing) and to competition in quantities. These results offer a novel argument against a per se rule concerning bundling in antitrust policy.

Suggested Citation

  • Edmond Baranes & Marion Podesta & Jean-Christophe Poudou, 2016. "Mixed bundling may hinder collusion," Post-Print hal-01827637, HAL.
    • Handle: RePEc:hal:journl:hal-01827637
    DOI: 10.1016/j.rie.2016.06.003
    Note: View the original document on HAL open archive server: https://hal.umontpellier.fr/hal-01827637
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    References listed on IDEAS

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    Cited by:

    1. Dana, James D., 2020. "Bundling can signal high quality," International Journal of Industrial Organization, Elsevier, vol. 69(C).

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    Keywords

    Mixed bundling; Collusion; Price competition;
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