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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

Digital Convergence and Conglomerate Mergers

Vol.22, No.3, September , 62–85



  •   (Dept. of Economics, Kookmin University)

  •   (Dept. of Economics, Seoul National University)

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Abstract  

We develop a formal model to deal with bundling in complementary markets. We develop the antitrust analysis of a merger between potentially complementary product producing firms when the merged firm might engage in bundling such as the proposed GE/Honeywell merger. Our model can be applied to the analysis of economic consequences of digital convergence. We show that the new multi-functional product as an outcome of digital convergence of two different products does not necessarily enhance competition in markets.


Keywords
   Bundling, Technical Integration, Digital convergence, Complementary products

JEL classification codes
   D4, L4, Q3
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