Competing Against Bundles

18 Pages Posted: 20 Nov 2000

See all articles by Barry J. Nalebuff

Barry J. Nalebuff

Yale University - Yale School of Management; Yale University - Cowles Foundation

Date Written: August 20, 2000

Abstract

In this paper, we show that a firm that sells a bundle of complementary products will have a substantial advantage over rivals who sell the component products individually. Furthermore, this advantage increases with the size of the bundle. Once there are four or more items, the bundle seller does better than when it sells each component individually. This model helps explain one factor in how Microsoft achieved dominance in the Office software suite against pre-existing and well-established rivals in each component.

This paper is a sequel to Bundling [Nalebuff (1999) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=185193].

JEL Classification: D43, L11, L12, C7

Suggested Citation

Nalebuff, Barry, Competing Against Bundles (August 20, 2000). Yale School of Management Working Paper No. ES-02. Available at SSRN: https://ssrn.com/abstract=239684 or http://dx.doi.org/10.2139/ssrn.239684

Barry Nalebuff (Contact Author)

Yale University - Yale School of Management ( email )

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Yale University - Cowles Foundation ( email )

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HOME PAGE: http://barrynalebuff.com

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