A more general theory of commodity bundling

Packaging as Commodity Bundling and Inter-type Competition in Retailing by

* Earlier versions of this paper were presented at The Economics of Retail Systems seminar at the University of Maryland. I thank the participants for their comments while claiming responsibility for any errors and omissions. 1 This work also provides references to the earlier literature. 2 Introduction There is a substantial literature on commodity bundling. A seminal point of departure for th...

To bundle or not to bundle

Commodity bundling is studied in an environment where the dispersion of valuations unambiguously decreases when two or more goods are sold as a bundle only. Bundling is more likely to dominate separately selling the goods if marginal costs are low relative to the average valuation, or if the distribution of valuations is very peaked around the mean. ∗This note unbundles results previously provi...

Commodity Bundling and the Leverage of Market Power

The modern literature on commodity bundling argues that a monopolist may use bundling to extend its monopoly power into an otherwise oligopolistic market by foreclosing entrants or excluding rivals. This approach is contrary to the Chicago critique of Posner and Bork, who defend bundling as irrelevant to such monopolization, being incapable of extending the “one monopoly rent.” However, this pa...

Effects of U.S. Macroeconomic Shocks on International Commodity Prices: Emphasis on Price and Exchange Rate Pass-through Effects

Using a structural VAR with block exogeneity, diagonality and identifying restrictions, this paper analyzes: first, the macroeconomic linkages among the oil price, U.S. output, interest rate, money supply, general price level and exchange rate and second, the relationships of the macroeconomic variables with the price indices of ten international nonfuel commodity groups. By assuming the block ...

Commodity Bundling and the Burden of Monopoly