Exclusionary Bundle Discounts: A Simple Model with two Applications
C.-Philipp Heller, Heiner Lindenlaub and Frank Maier-Rigaud (2020) Exclusionary Bundle Discounts: A Simple Model with two Applications, Economics Bulletin, 40(1), 210-216.
6 Pages Posted: 10 Dec 2018 Last revised: 6 Feb 2020
Date Written: April 16, 2019
We develop a simple theoretical model of exclusionary bundle discounts. Based on the model, we develop a screening test for exclusionary bundle discounts. This test only requires knowledge of prices and an estimate of the coverage of the bundle discount. We apply this test to the Vodafone/Liberty Global merger in Germany and find bundle discounts in the German broadband Internet access market consistent with exclusion. We finally use the model to simulate the merger’s price effects.
Keywords: Exclusionary Pricing, Bundling, Mergers
JEL Classification: L12, L41, L96
Suggested Citation: Suggested Citation