Price discrimination through transactions bundling: The case of monopsony

B-Tier
Journal: Journal of Mathematical Economics
Year: 2008
Volume: 44
Issue: 7-8
Pages: 672-681

Authors (2)

Dassiou, Xeni (City University) Glycopantis, Dionysius (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper shows that for a price setting monopsony, offering to transact in a mixed bundle of goods of uncertain quality is profit enhancing. The magnitude of this enhancement relative to no bundling is greater the smaller the gap in the degree of quality uncertainty between the two goods purchased is. Moreover, contrary to coventional wisdom, the use of mixed purchase bundling by a monopsonist is trade enhancing. There is more room for a dramatic improvement in the volume of trade in a good with a low degree of quality certainty if its purchase is combined with a good of a substantially higher quality certainty.

Technical Details

RePEc Handle
repec:eee:mateco:v:44:y:2008:i:7-8:p:672-681
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25