Bundling and downstream entry
Year: 2026
Type: article
Abstract: We investigate the incentives of an upstream supplier to enter the downstream market where the alternative is to sell via a downstream platform who offers all products as a bundle. When consumers can multihome, following entry the supplier faces increased downstream competition but benefits from greater price setting flexibility. We show that entry becomes relatively more profitable if the products are closer substitutes or the correlation between product valuations is weaker. Our results have important implications on recent developments in industries such as video and music streaming.
Source: Information Economics and Policy
Authors: Firat Inceoglu, Xingyi Liu
Institutions: University of Würzburg, Aston University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,930
OpenAlex ID: W7126078846