Bundling and Consumer Misperception

28 Pages Posted: 18 Jan 2006


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.

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: https://ssrn.com/abstract=876944

Oren Bar-Gill (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

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