Bundling and downstream entry

Firat Inceoglu; Xingyi Liu

doi:10.1016/j.infoecopol.2026.101160

Bundling and downstream entry

Firat Inceoglu^*
, Xingyi Liu

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

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Abstract

We investigate the incentives of an upstream producer to enter the downstream market where the alternative is to sell via a downstream platform who offers all products as a bundle. When consumers can multihome, following entry the producer faces increased downstream competition but benefits from greater price setting flexibility. We show that entry becomes relatively more profitable if the products are closer substitutes or the correlation between product valuations is weaker. Our results have important implications on recent developments in industries such as video and music streaming.

Original language	English
Article number	101160
Number of pages	14
Journal	Information Economics and Policy
Volume	72
Early online date	29 Jan 2026
DOIs	https://doi.org/10.1016/j.infoecopol.2026.101160
Publication status	Published - 1 Jun 2026

Bibliographical note

Data Access Statement

No data was used for the research described in the article.

Keywords

Bundling
Entry
Multihoming

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10.1016/j.infoecopol.2026.101160

Bundling and downstream entry - Inceoglu and Liu 2026
© 2026 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/)
Final published version, 5.53 MBLicence: CC BY 4.0

Cite this

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title = "Bundling and downstream entry",

abstract = "We investigate the incentives of an upstream producer to enter the downstream market where the alternative is to sell via a downstream platform who offers all products as a bundle. When consumers can multihome, following entry the producer faces increased downstream competition but benefits from greater price setting flexibility. We show that entry becomes relatively more profitable if the products are closer substitutes or the correlation between product valuations is weaker. Our results have important implications on recent developments in industries such as video and music streaming.",

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AB - We investigate the incentives of an upstream producer to enter the downstream market where the alternative is to sell via a downstream platform who offers all products as a bundle. When consumers can multihome, following entry the producer faces increased downstream competition but benefits from greater price setting flexibility. We show that entry becomes relatively more profitable if the products are closer substitutes or the correlation between product valuations is weaker. Our results have important implications on recent developments in industries such as video and music streaming.

KW - Bundling

KW - Entry

KW - Multihoming

UR - https://www.sciencedirect.com/science/article/pii/S0167624526000028

U2 - 10.1016/j.infoecopol.2026.101160

DO - 10.1016/j.infoecopol.2026.101160

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Bundling and downstream entry

Abstract

Bibliographical note

Data Access Statement

Keywords

Access to Document

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