The impact of product differentiation on retail bundling in a vertical market / Angelika Endres-Fröhlich, Burkhard Hehenkamp, Joachim Heinzel
Content
- Introduction
- Literature
- The model and its market equilibria
- title
- Price and demand behavior under separate selling and bundling
- Bundling incentives
- Consequences of bundling on the market equilibrium and social welfare
- Endogenous distribution channels
- Conclusion
- Decentralized channel (main model)
- Separate selling: market equilibrium
- Separate selling: welfare
- Bundling: market equilibrium
- Bundling: welfare
- Summary of the market outcomes
- Centralized channel
- Multi-product monopoly
- Market outcome under separate selling
- Market outcome under bundling
- Summary of the market outcomes
- Bundling decision
- Further analysis
- Comparisons: downstream prices
- Partial derivatives: downstream prices
- Partial derivatives: quantities
- Endogenous distribution channels
- Partial exclusivity – manufacturer 1 sells exclusively
- No exclusivity – both manufacturers sell non-exclusively
- Full exclusivity – dual exclusive relationships
- Full exclusivity – exclusive selling to same retailer
- Partial exclusivity – manufacturer 2 sells exclusively
- Market outcomes across distribution systems
- Determination of Nash equilibria
- Proofs of Propositions 1 – 5