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dc.contributor.authorSpier, Kathryn E.
dc.contributor.authorDana, James Dwight
dc.date.accessioned2018-02-08T21:03:48Z
dc.date.issued2015
dc.identifier.citationKathryn E. Spier & James D. Dana, Jr., Do Tying, Bundling, and Other Purchase Restraints Increase Product Quality?, Int'l J. Indus. Org. (2015).en_US
dc.identifier.issn0167-7187en_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:34816656
dc.description.abstractTying, bundling, minimum purchase requirements, loyalty discounts, exclusive dealing, and other purchase restraints can create stronger incentives for firms to invest in product quality. In our first example, the firm sells a durable experience good and a complementary non-durable good to a representative consumer. Tying shifts profits from the durable to the non-durable good, making profits more sensitive to the consumer's experience. In our second example, the firm sells a single experience good to consumers with heterogeneous demands. Minimum purchase requirements screen out the low-volume consumers who would otherwise free ride on the superior monitoring of the high-volume consumers. The examples illustrate that purchase restraints can increase both firm profits and consumer surplus by making firm profits more sensitive to consumer experience, either directly by giving the consumer more control over the stream of profits or indirectly by constraining consumers to monitor more intensively.en_US
dc.language.isoen_USen_US
dc.publisherElsevieren_US
dc.relation.isversionofhttp://dx.doi.org/10.1016/j.ijindorg.2015.03.005en_US
dc.relation.hasversionhttp://ssrn.com/abstract=2587975en_US
dash.licenseOAP
dc.titleDo Tying, Bundling, and Other Purchase Restraints Increase Product Quality?en_US
dc.typeJournal Articleen_US
dc.description.versionAccepted Manuscripten_US
dc.relation.journalInternational Journal of Industrial Organizationen_US
dash.depositing.authorSpier, Kathryn E.
dc.date.available2018-02-08T21:03:48Z
dc.identifier.doi10.1016/j.ijindorg.2015.03.005*
dash.contributor.affiliatedDana, James
dash.contributor.affiliatedSpier, Kathryn


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