Bundling and Price-Matching in Competitive Complementary Goods Markets

Esmat Sangari; Rajni Kant Bansal

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arXiv · 2601.15350

Bundling and Price-Matching in Competitive Complementary Goods Markets

Esmat Sangari·Rajni Kant Bansal

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Abstract

We study mixed bundling and competitive price-matching guarantees (PMGs) in a duopoly selling complementary products to heterogeneous customers. One retailer offers mixed bundling while the rival sells only a bundle. We characterize unique pure-strategy Nash equilibria across subgames and compare them to a no-bundling benchmark. Mixed bundling strictly dominates whenever an equilibrium exists. Conditional on bundling, PMG adoption trades off strategic demand capture against margin losses on loyal customers and varies systematically with relative demand responsiveness to prices and complementarities.

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Esmat Sangari, Rajni Kant Bansal. 2026-01-21. Bundling and Price-Matching in Competitive Complementary Goods Markets. https://arxiv.org/abs/2601.15350

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