Upstream Bundling and Leverage of Market Power
Bibliographic Data
| ID | 9950068 |
|---|---|
| Authors | Alexandre de Cornière (0000-0002-9835-3992, Toulouse School of Economics, University of Toulouse Capitole, France), Greg Taylor (0000-0002-4563-4862, University of Oxford) |
| Year | 2021 |
| Volume | 131 |
| Issue | 640 |
| Pages | 3122-3144 |
| Publication date | 2021-04-06 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1093/ej/ueab024 |
| OpenAlex | W2905970740 |
| Language | EN |
| Citations received | 4 |
| References cited | 37 |
We present a novel rationale for bundling in vertical relations. In many markets, upstream firms compete to be in the best downstream slots (e.g., the best shelf in a retail store or the default application on a platform). If a multi-product upstream firm faces competition for a subset of its products, we show that tying the monopolised product with the competitive ones can reduce upstream rivals’ willingness to offer slotting fees to retailers. This strategy does not rely on entry deterrence and can be achieved through contractual or even virtual tying. The model is particularly relevant to the Google-Android case
Business · Commerce · Competition (biology · Component (thermodynamics · Downstream (manufacturing · Economics · Industrial organization · Leverage (statistics · Market power · Microeconomics · Monopoly · Profit (economics · Telecommunications · Upstream (networking · Computer Science · Digital Platforms and Economics · Engineering · ICT Impact and Policies · Marketing · Merger and Competition Analysis
| Citations per year | 0.8 |
|---|---|
| Citation span | 2021 - 2026 (6) |
| Highly cited | No |