The use of full-line forcing contracts in the video rental industry

Katherine Ho, Justin Ho, Julie Holland Mortimer

Research output: Contribution to journalReview articlepeer-review

19 Scopus citations

Abstract

Bundling is at the forefront of many policy debates as new technologies allow frms to implement more complex bundling arrangements. Realistic analyses of bundling-particularly between suppliers and retailers-require detailed data on both supply arrangements and consumer demand. We analyze frms' use of bundling as a vertical restraint (known as full-line forcing) using extensive supply and demand data from the video rental industry. Our model captures key details of the market that determine frms' contractual choices, and sheds light on the implications of these decisions. The empirical approach provides a model for how to analyze bundling when detailed data are available.

Original languageEnglish (US)
Pages (from-to)686-719
Number of pages34
JournalAmerican Economic Review
Volume102
Issue number2
DOIs
StatePublished - Jun 22 2012
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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