TY  - JOUR
AU  - Ho,Justin
AU  - Ho,Katherine
AU  - Mortimer,Julie Holland
TI  - The Use of Full-line Forcing Contracts in the Video Rental Industry
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14588
PY  - 2008
Y2  - December 2008
UR  - http://www.nber.org/papers/w14588
L1  - http://www.nber.org/papers/w14588.pdf
N1  - Author contact info:
Justin Ho
Dean & Company
8065 Leesburg Pike, 5th Floor
Vienna, VA  22182
E-Mail: ho@dean.com

Katherine Ho
Columbia University
Department of Economics
1037 International Affairs Building
420 West 118th Street
New York, NY 10027
Tel: 212/854-7605
Fax: 212/854-8059
E-Mail: kh2214@columbia.edu

Julie H. Mortimer
Department of Economics
Boston College
140 Commonwealth Avenue
Chestnut Hill, MA 02467
Tel: 617-552-3676
Fax: 617-552-2308
E-Mail: julie.mortimer.2@bc.edu
AB  - We provide an empirical study of bundling in a supply chain, referred to as fullline forcing. We use an extensive dataset on contracts between video retailers and movie distributors to analyze the choices made on both sides of the market: which distributors offer full-line forcing contracts, which retailers take them up, and whether their decisions are profitable. Most large distributors offer full-line forcing contracts in our data. Our simulations indicate that their choices of which contracts to offer are profit-maximizing. However, many retailers prefer to utilize linear pricing contracts even when our model indicates that this may not be profit-maximizing.
ER  -