Bundling and horizontally differentiated innovation
Hui‐Ling Chung,
Yan‐Shu Lin,
Pei‐Cyuan Shih
Abstract:This research builds a three‐stage (bundling, horizontally differentiated innovations [HDIs], and outputs) game in which only one multi‐product firm undertakes a bundling strategy in order to analyze the impacts of bundling on HDIs and competes with a single‐product firm. It is found that no matter what the degree of initial product substitution is, bundling will definitely amplify the degree of horizontal product differentiation. When the initial degree of product substitution is large, the bundling strategy … Show more
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