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Emanuela Carbonara (spring 2008)

NWO Visitors Grant B 45-300

(Applicant: Giuseppe Dari-Mattiacci)

In this research project analyzes the effects of bundling in the presence of multiple sellers of (imperfectly) complementary goods. It is a result widely known in the literature that when complementary goods are sold by different sellers the outcome in terms of social surplus is worse than that generated by a monopoly selling all the complementary goods. This result is known as "complementary oligopoly" in the economic literature and has recently become very popular in the legal literature under the label "the tragedy of the anticommons". In this case, under the assumption that consumers are willing to buy all complements, bundling is definitely beneficial, as it yields a lower total price for the bundle than the sum of the prices for each complement when goods are sold by different buyers.

The question is now what happens when we consider the possibility of competition in the market for each complement and when we release the assumption that all consumers necessarily buy all the complements. In other words, there might be several producers for each complementary good. Producers of a given complement can produce goods that are either perfect or less than perfect substitutes. Moreover, consumers may be active in a subset of markets only.