Exclusionary Bundle Discounts: A Simple Model with Two Applications

05 February 2020
By Prof. Dr. Frank Maier-Rigaud, Heiner Lindenlaub, and Dr. C.-Philipp Heller

In the article “Exclusionary Bundle Discounts: A Simple Model with Two Applications,” published in Volume 40, Issue 1, of Economics Bulletin, NERA Managing Director Prof. Dr. Frank Maier-Rigaud, Senior Consultant Heiner Lindenlaub, and Consultant Dr. C.-Philipp Heller develop a simple theoretical model to test for exclusionary bundle discounts.

The authors apply their test to the Vodafone/Liberty Global merger in Germany and find bundle discounts in the German broadband Internet access market consistent with exclusion. They also use the model to simulate the merger’s price effects.