Bundling in competition boosts firms but squeezes consumer wallets.
This study looks at how competition between companies affects the benefits of selling products together in a bundle. The researchers found that when companies compete by setting prices, selling products together in a bundle can lead to lower prices for consumers. This benefits both companies but can hurt consumers by reducing their options. However, overall social welfare, which includes factors beyond just consumer satisfaction, increases with bundling. So, bundling creates a conflict between what's best for society as a whole and what's best for individual consumers.