Endogenous Integration and Welfare in Complementary Goods Markets

Please use this identifier to cite or link to this item: http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1749

Title:	Endogenous Integration and Welfare in Complementary Goods Markets
Keywords:	Complementary products Integration Bundling
Description:	This paper analyzes the strategic decision to integrate by rms that pro- duce complementary products. Integration entails bundling pricing. We nd out that integration is privately pro table for a high enough degree of product di¤erentiation, that pro ts of the non-integrated rms decrease, and that con- sumer surplus need not necessarily increase when rms integrate despite the fact that prices diminish. Thus, integration of a system is welfare-improving for a high enough degree of product di¤erentiation combined with a mini- mum demand advantage relative to the competing system. Overall, and from a number of extensions undertaken, we conclude that bundling need not be anti-competitive and that integration should be permitted only under some circumstances.
URI:	http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1749
Other Identifiers:	http://hdl.handle.net/10261/1749
Appears in Collections:	Digital Csic

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