---
_id: '44091'
abstract:
- lang: eng
  text: We study the effects of product differentiation on the bundling incentives
    of a two-product retailer. Two monopolistic manufacturers each produce a differentiated
    good. One sells it to both retailers, while the other only supplies a single retailer.
    Retailers compete in prices. Retail bundling is profitable when the goods are
    close substitutes. Only then is competition so intense that the retailer uses
    bundling to relax competition both within and across product markets, despite
    an aggravation of the double marginalization problem. Our asymmetric market structure
    arises endogenously for the case of close substitutes. In this case, bundling
    reduces social welfare.
author:
- first_name: Angelika Elfriede
  full_name: Endres-Fröhlich, Angelika Elfriede
  id: '48794'
  last_name: Endres-Fröhlich
- first_name: Burkhard
  full_name: Hehenkamp, Burkhard
  id: '37339'
  last_name: Hehenkamp
- first_name: Joachim
  full_name: Heinzel, Joachim
  last_name: Heinzel
citation:
  ama: Endres-Fröhlich AE, Hehenkamp B, Heinzel J. <i>The Impact of Product Differentiation
    on Retail Bundling in a Vertical Market</i>.
  apa: Endres-Fröhlich, A. E., Hehenkamp, B., &#38; Heinzel, J. (n.d.). <i>The Impact
    of Product Differentiation on Retail Bundling in a Vertical Market</i>.
  bibtex: '@book{Endres-Fröhlich_Hehenkamp_Heinzel, title={The Impact of Product Differentiation
    on Retail Bundling in a Vertical Market}, author={Endres-Fröhlich, Angelika Elfriede
    and Hehenkamp, Burkhard and Heinzel, Joachim} }'
  chicago: Endres-Fröhlich, Angelika Elfriede, Burkhard Hehenkamp, and Joachim Heinzel.
    <i>The Impact of Product Differentiation on Retail Bundling in a Vertical Market</i>,
    n.d.
  ieee: A. E. Endres-Fröhlich, B. Hehenkamp, and J. Heinzel, <i>The Impact of Product
    Differentiation on Retail Bundling in a Vertical Market</i>. .
  mla: Endres-Fröhlich, Angelika Elfriede, et al. <i>The Impact of Product Differentiation
    on Retail Bundling in a Vertical Market</i>.
  short: A.E. Endres-Fröhlich, B. Hehenkamp, J. Heinzel, The Impact of Product Differentiation
    on Retail Bundling in a Vertical Market, n.d.
date_created: 2023-04-20T16:21:28Z
date_updated: 2023-04-20T17:15:48Z
department:
- _id: '280'
- _id: '475'
jel:
- D43
- L13
- L42
keyword:
- Retail bundling
- upstream market power
- double marginalization
- product differentiation
language:
- iso: eng
page: '43'
project:
- _id: '1'
  name: 'SFB 901: SFB 901'
- _id: '2'
  name: 'SFB 901 - A: SFB 901 - Project Area A'
- _id: '7'
  name: 'SFB 901 - A3: SFB 901 - Subproject A3'
publication_status: draft
status: public
title: The Impact of Product Differentiation on Retail Bundling in a Vertical Market
type: report
user_id: '37339'
year: '2022'
...
---
_id: '10332'
abstract:
- lang: eng
  text: We analyze the incentives for retail bundling and the welfare effects of retail
    bundling in a decentralized distribution channel with two retailers and two monopolistic
    manufacturers. One manufacturer exclusively sells his good to one retailer, whereas
    the other manufacturer sells his good to both retailers. Thus, one retailer is
    a monopolist for one product but competes with the other retailer in the second
    product market. The two-product retailer has the option to bundle his goods or
    to sell them separately. We find that bundling aggravates the double marginalization
    problem for the bundling retailer. Nevertheless, when the retailers compete in
    prices, bundling can be more profitable than separate selling for the retailer
    as bundling softens the retail competition. The ultimate outcome depends on the
    manufacturers’ marginal costs. Given retail quantity competition, however, bundling
    is in no case the retailer’s best strategy. Furthermore, we show that profitable
    bundling reduces consumer and producer surplus in the equilibrium.
author:
- first_name: Joachim Maria Josef
  full_name: Heinzel, Joachim Maria Josef
  id: '53445'
  last_name: Heinzel
citation:
  ama: 'Heinzel JMJ. <i>Bundling in a Distribution Channel with Retail Competition</i>.
    Paderborn University: CIE Working Paper Series; 2019.'
  apa: 'Heinzel, J. M. J. (2019). <i>Bundling in a Distribution Channel with Retail
    Competition</i>. Paderborn University: CIE Working Paper Series.'
  bibtex: '@book{Heinzel_2019, place={Paderborn University}, title={Bundling in a
    Distribution Channel with Retail Competition}, publisher={CIE Working Paper Series},
    author={Heinzel, Joachim Maria Josef}, year={2019} }'
  chicago: 'Heinzel, Joachim Maria Josef. <i>Bundling in a Distribution Channel with
    Retail Competition</i>. Paderborn University: CIE Working Paper Series, 2019.'
  ieee: 'J. M. J. Heinzel, <i>Bundling in a Distribution Channel with Retail Competition</i>.
    Paderborn University: CIE Working Paper Series, 2019.'
  mla: Heinzel, Joachim Maria Josef. <i>Bundling in a Distribution Channel with Retail
    Competition</i>. CIE Working Paper Series, 2019.
  short: J.M.J. Heinzel, Bundling in a Distribution Channel with Retail Competition,
    CIE Working Paper Series, Paderborn University, 2019.
date_created: 2019-06-28T08:42:49Z
date_updated: 2022-01-06T06:50:37Z
ddc:
- '330'
department:
- _id: '280'
- _id: '475'
file:
- access_level: closed
  content_type: application/pdf
  creator: jheinzel
  date_created: 2019-06-28T08:44:52Z
  date_updated: 2019-06-28T08:44:52Z
  file_id: '10333'
  file_name: WP120.pdf
  file_size: 375054
  relation: main_file
  success: 1
file_date_updated: 2019-06-28T08:44:52Z
has_accepted_license: '1'
keyword:
- retail bundling
- leverage theory
- double marginalization
language:
- iso: eng
place: Paderborn University
project:
- _id: '1'
  name: SFB 901
- _id: '2'
  name: SFB 901 - Project Area A
- _id: '7'
  name: SFB 901 - Subproject A3
publisher: CIE Working Paper Series
status: public
title: Bundling in a Distribution Channel with Retail Competition
type: report
user_id: '53445'
year: '2019'
...