Bundling and Consumer Misperception

Bar-Gill, Oren

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Bundling and Consumer Misperception

Oren Bar-Gill

New York University School of Law

University of Chicago Law Review, 2006
NYU, Law and Economics Research Paper No. 06-02

Abstract:
This Essay studies bundling of two (or more) products as a strategic response to consumer misperception. In contrast to the bundling and tying studied in the antitrust literature - strategies used by a seller with market power in market A trying to leverage its market power into market B - bundling in response to consumer misperception may occur in intensely competitive markets. The analysis demonstrates that such competitive bundling can be either welfare enhancing or welfare reducing. The Essay considers several "unbundling policies" that can protect consumers and increase welfare in markets where bundling is undesirable.

Number of Pages in PDF File: 28

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Date posted: January 18, 2006

Suggested Citation

Bar-Gill, Oren, Bundling and Consumer Misperception. University of Chicago Law Review, 2006; NYU, Law and Economics Research Paper No. 06-02. Available at SSRN: http://ssrn.com/abstract=876944

Contact Information

Oren Bar-Gill (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-998-6222 (Phone)
212-995-4590 (Fax)