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.
|Number of pages||16|
|Early online date||09 Feb 2015|
|Publication status||Published - 01 Mar 2016|
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- Faculty of Business and Physcial Sciences, Aberystwyth Business School - Lecturer in Economics
Person: Teaching And Research