On November 18, 2020, the 2nd SFB 901 seminar in the winter semester will take place.
4:00 - 5:00 subproject A3
Speakers: Prof. Dr. Burkhard Hehenkamp + Angelika Endres-Fröhlich
Title: The Impact of Product Differentiation on Retail Bundling in a Vertical Market
The talk will be held via BigBlueButton.
Retail bundling can be profitable for independent goods when the competition reducing effect of bundling outweighs the negative effects of double marginalization in the distributional channel. In this study, we examine the effect of product differentiation on the bundling incentives of a two-product retailer. The market consists of two differentiated goods, two retailers and two monopolistic manufacturers. One manufacturer sells to both retailers; the other one supplies a single retailer only. Retailers compete in prices. We find that retail bundling is only profitable when the goods are close substitutes. Bundling raises social welfare when the goods are very close substitutes.