Bundling and the Ge-Honeywell Merger

35 Pages Posted: 5 Sep 2002

See all articles by Barry J. Nalebuff

Barry J. Nalebuff

Yale University - Yale School of Management; Yale University - Cowles Foundation

Date Written: September 2002


The economic theory of bundling has moved from the classroom and academic journals to the public policy arena. Its debut was dramatic. On July 3, 2001, the European Commission blocked the $42 billion merger between GE and Honeywell. A primary reason for their objection to this combination was a concern over bundling.

This paper uses the context of the proposed GE-Honeywell merger to address the concerns raised by bundling. We set out the theory as put forth by the Commission and try to reconcile this theory with both the economic theory of bundling and the facts of the case. We discuss what is meant by bundling and explain when it is a potential problem and when it is not. Based on this understanding, we propose anti-trust policy recommendations to deal with the novel issues raised by bundling.

Keywords: Bundling, Antitrust, EU, GE, Honeywell

JEL Classification: C7, D4, K0, L4

Suggested Citation

Nalebuff, Barry, Bundling and the Ge-Honeywell Merger (September 2002). Available at SSRN: https://ssrn.com/abstract=327380 or http://dx.doi.org/10.2139/ssrn.327380

Barry Nalebuff (Contact Author)

Yale University - Yale School of Management ( email )

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Yale University - Cowles Foundation ( email )

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HOME PAGE: http://barrynalebuff.com

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