On the Relationship between Spillovers and Bundling

16 Pages Posted: 25 Feb 2016

See all articles by Maria Plotnikova

Maria Plotnikova

Bangor University - University of Wales, Aberystwyth

Sudipta Sarangi

Virginia Polytechnic Institute & State University

Sushmita Swaminathan

Axel Springer AG

Date Written: March 2016

Abstract

This paper examines the relationship between the bundling decision of a large firm and the impact of spillovers from smaller firms drawing on stylized facts from the software industry. We find that bundling occurs only in the presence of significant spillovers from the two smaller firms. The large firm does not bundle when there are spillovers for only one product. Finally, we show that welfare is higher under bundling.

Suggested Citation

Plotnikova, Maria and Sarangi, Sudipta and Swaminathan, Sushmita, On the Relationship between Spillovers and Bundling (March 2016). The Manchester School, Vol. 84, Issue 2, pp. 181-196, 2016, Available at SSRN: https://ssrn.com/abstract=2737643 or http://dx.doi.org/10.1111/manc.12091

Maria Plotnikova

Bangor University - University of Wales, Aberystwyth

Elystan Morgan Building
Llanbadarn Campus
Aberystwyth, Ceredigion, Wales SY23 3AS
United Kingdom

Sudipta Sarangi

Virginia Polytechnic Institute & State University ( email )

250 Drillfield Drive
Blacksburg, VA 24061
United States

Sushmita Swaminathan (Contact Author)

Axel Springer AG

Axel-Springer-Stra├če 65
Berlin, 10888
Germany

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