Multi-product bargaining, bundling, and buyer power

Arbeitspapier

We re-consider the bilateral bargaining problem of a multi-product, manufacturer-retailer trading relationship. O'Brien and Shaffer (Rand JE 35:573-598, 2005) have shown that the unbundling of contracts leads to downward distorted production levels if seller power is strong, while otherwise the joint profit maximizing quantities are contracted (which is also always the case when bundling contracts are feasible). We show that the unbundling of contracts also leads to downward distorted output levels when the buyer firm has sufficient (Nash) bargaining power (i.e., buyer power). Our result is driven by cost substitutability (diseconomies of scope).

Object Details

• ISBN: 978-3-86304-328-5
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 329

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Monopolization; Horizontal Anticompetitive Practices ; Antitrust Law
• Subject: Vertical Restraints ; Bundling ; Buyer Power

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dertwinkel-Kalt, Markus ; Wey, Christian
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/210462
• Last update: 10.03.2025, 11:43 AM CET