Product bundling may benefit or harm consumers depending on the correlation between consumer willingness to pay for the bundled goods and the levels of market dominance of firms. We develop a structural demand model that allows for correlated consumer's willingness to pay and flexible...

Product bundling may benefit or harm consumers dependingon the correlation betweenconsumer willingness to pay for the bundledgoods and the levels of market dominance of firms. We develop astructural demand model that allows for correlatedconsumer's willingness to pay and flexible...

Modern economic theory predicts that tying can serve as a tool for leveraging market power. In line with this economic theory, competition authorities regulate the tying of Microsoft Windows with its Media Player or Internet browser in the EU and Japan. The authorities also take note of the...