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Competitive Nonlinear Pricing and Bundling.

Abstract:

We examine the impact of multiproduct nonlinear pricing on profit, consumer surplus and welfare in a duopoly. When consumers buy all their products from one firm (the one-stop shopping model), nonlinear pricing leads to higher profit and welfare, but often lower consumer surplus, than linear pricing. By contrast, in a unit-demand model where consumers may buy one product from one firm and another product from another firm, bundling generally acts to reduce profit and welfare and to boost cons...

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Mark Armstrong More by this author
John Vickers More by this author
Volume:
281
Series:
Discussion paper series
Publication date:
2006
URN:
uuid:c6e17cc5-f7a3-4387-be17-949b97a429e7
Local pid:
oai:economics.ouls.ox.ac.uk:13478
Language:
English

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