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Abstract
This paper investigates bundle pricing under imperfect competition. In a multiproduct context,
we first examine how substitution/complementarity relationships among products can affect
pricing. This is used to motivate multi-product generalizations of the Herfindahl-Hirschmann
index (GHHI) capturing cross-market effects of imperfect competition on bundle pricing. The
GHHI model is applied to pricing of conventional and patented biotech seeds in the US from
2000-2007. One major finding is that standard component pricing in biotech traits is soundly
rejected in favor of sub-additive bundle pricing. This result is consistent with the presence of
scope economies in the production of genetic traits. The econometric estimates show how
changes in market structures (as measured by both own- and cross-Herfindal indexes) affect
U.S. corn seed prices.