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Bundling, tying, and collusion

Abstract : Tying a good produced monopolistically with a complementary good produced in an oligopolistic market in which there is room for collusion can be profitable if some buyers of the oligopoly good have no demand for the monopoly good. The reason is that a tie makes part of the demand in the oligopolistic market out of the reach of the tying firm's rivals, which decreases the profitability of deviating from a collusive agreement. Tying may thus facilitate collusion. It may also allow the tying firm to alter market share allocation in a collusive oligopolistic market.
Keywords : Bundling Tying Collusion
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Submitted on : Tuesday, November 20, 2012 - 8:49:31 AM
Last modification on : Friday, April 29, 2022 - 10:13:01 AM

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David Spector. Bundling, tying, and collusion. International Journal of Industrial Organization, 2007, 25 (3), pp.575-581. ⟨10.1016/j.ijindorg.2006.06.003⟩. ⟨halshs-00754225⟩



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