Document Type

Discussion Paper

Publication Date

1-18-2021

CFDP Number

2270

CFDP Pages

40

Journal of Economic Literature (JEL) Code(s)

D43, L13, L15

Abstract

This paper proposes a framework for studying competitive mixed bundling with an arbitrary number of firms. We examine both a firm’s incentive to introduce mixed bundling and equilibrium tariffs when all firms adopt the mixed-bundling strategy. In the duopoly case, relative to separate sales, mixed bundling has ambiguous impacts on prices, profit and consumer surplus; with many firms, however, mixed bundling typically lowers all prices, harms firms and benefits consumers.

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