CFDP 2270

Mixed Bundling in Oligopoly Markets


Publication Date: January 2021

Pages: 40


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.

Keywords: Bundling, Multiproduct pricing, Price competition, Oligopoly

JEL Classification Codes: D43, L13, L15

JEL Classification Codes: D43L13L15

PDF icon d2270.pdf