On the Relationship between Spillovers and Bundling

Maria Plotnikova, Sudipta Sarangi, Sushmita Swaminathan

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Abstract

This paper examines the relationship between the bundling decision of a large firm and the impact of spillovers from smaller firms drawing on stylized facts from the software industry. We find that bundling occurs only in the presence of significant spillovers from the two smaller firms. The large firm does not bundle when there are spillovers for only one product. Finally, we show that welfare is higher under bundling.
Original languageEnglish
Pages (from-to)181-196
Number of pages16
JournalManchester School
Volume84
Issue number2
Early online date09 Feb 2015
DOIs
Publication statusPublished - 01 Mar 2016

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