lWhile Microsoft attempted to apply a pure bundling strategy with respect to the sale of its Windows operating system (bundling Windows with Explorer and Windows Media Pioyer). it applies a rather different strategy with respect to its twice suite of programs. As we noted above, consumers can purchase the full suite of Qice programs or they can purchase some but not necessarily all of the individual programs. This is an example of mixed bundling. A possible explanation for the difference in strategy can be suggested. Microsoft had an effective monopoly on operating systems with its Windows program and so had the potential to leverage that monopoly into browsers and media player software. By contrast, Microsoft faces competition from established companies offering word processing, spreadsheet, and presentation programs. The best that it can do is to adopt some kind of prot maximizing strategy, mixed bundling being one such strategy. Table 8.4 Bundling and entry~deterrence Entry Cost inewnbent Entry-Deterring Prot Prot increase per Consumer F f from Bundiing Non-Bnnditng Bundling 0.25 0.513 0.5441) 3.8% 0.20 0.45!) 0.5441] 20.9% 0.15 0.400 0.54413 36% 0.105 0.355!) 0.5445! 53.2% 0.0844 0.3341440l 0520.0I 53.2% 0.066 0.3161) 0.4925! 55.7% 0.048 0.29 3D 0.4331} 47% Returning to our simple model of the last two sections, the monopolist applying a mixed bundling strategy offers to sell the two goods separately at specied prices, respectively, of p1 and p: {which are not necessarily the monopoly prices) and also sells them as a bundle at price p3 (again not necessarily the monopoly pure bundle price). Of course, for this to make sense, it must again be the case that p3