Citation

Discussion Paper Details

Please find the details for DP9181 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Ain?t it "Suite"? Bundling in the PC Office Software Market

Author(s): Neil Gandal, Sarit Markovich and Michael Riordan

Publication Date: October 2012

Keyword(s): Bundling, Office Productivity Software and Simulations

Programme Area(s): Industrial Organization

Abstract: We examine the importance of office suites for the evolution of the PC office software market in the 1990s. An estimated discrete demand choice model reveals a positive correlation of consumer values for spreadsheets and word processors, a bonus value for suites, and advantages for Microsoft products. We employ the estimates to simulate various hypothetical market structures to evaluate the profitability, welfare, and competitive effects of suites under alternative correlation assumptions.We find that there is a huge benefit to firms from bundling components (i.e., a spreadsheet and a wordprocessor) when the correlation of consumer preferences over the components in the bundle is positive. Our work adds another aspect to the recent work in the strategy literature that examines benefits from bundling when there are complementary relationships across the products in the bundle.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9181

Bibliographic Reference

Gandal, N, Markovich, S and Riordan, M. 2012. 'Ain?t it "Suite"? Bundling in the PC Office Software Market'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9181