Chioveanu, Ioana - Instituto Valenciano de Investigaciones Económicas (IVIE) - 2008
I analyze the implications of bundling on price competition in a market with complementary products. Using a model of … study how they change with the size of the bundle. With an inelastic demand, bundling creates an advantage over … uncoordinated rivals who cannot improve by bundling. I show that this no longer holds with an elastic demand. The incentives to …