Optimal bundling under imperfect competition

Vamosiu, Adriana

doi:10.1016/j.ijpe.2017.09.016

Cited by 19 publications

(13 citation statements)

References 21 publications

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“…Investigated topics have included the role of complementarity and substitutability of the bundled services (McAfee et al, 1989;Yan et al, 2014) as well as optimal bundling strategies in different competitive situations; i.e. perfect and imperfect competition (Adams and Yellen, 1976;Vamosiu, 2018). The incentive to bundle when consumers' valuation are non-additive (Armstrong, 2013), the implications of bundling on marketing (Stremersch and Tellis, 2002) and bundling as an instrument to deter competitors from entering a market (Eppen et al, 1991) have also been investigated.…”

Section: Literature Reviewmentioning

confidence: 99%

“…to introduce new products or to deter competitors from entering a market). Under certain conditions, bundling can also be an effective tool for price discrimination when knowledge about consumer preferences is limited (McAfee et al, 1989;Sheikhzadeh and Elahi, 2013;Vamosiu, 2018). For transportation service bundling and MaaS, the goal is not a vertical integration by a monopoly provider, but an integration of mobility services across different mobility providers.…”

Section: Introductionmentioning

confidence: 99%

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Transportation service bundling – For whose benefit? Consumer valuation of pure bundling in the passenger transportation market

Guidon

Wicki

Bernauer

et al. 2020

Transportation Research Part A: Policy and Practice

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Novel approaches to service bundling in the passenger transportation market are enabled by technology driven innovations and give rise to so called "Mobility as a Service" (MaaS) concepts. These approaches promise to increase service quality of existing public transportation, decrease car ownership, reduce private vehicle miles and lower the environmental burden of the transportation system. However, the potential effects of service bundles in the passenger transportation market are still largely unclear. In a competitive market, the potential success of transportation service bundles follows consumer valuation of the bundles as compared to valuation of stand-alone services. Thus, the difference between the bundle and sum-of-parts willingness to pay (WTP) is an indicator of service integration valuation, which effects the competitiveness of the service bundles. In this study, several discrete choice experiments were conducted to indirectly estimate consumers' WTP and service integration valuation. The results indicate that public transportation, car-sharing, and park and ride services are valuated significantly higher when offered in a bundle instead of as a stand-alone service. Bicycle-sharing, electrical bicycle (e-bike) sharing and taxi services are valuated lower. Potential consumers also exhibit a high WTP for a smartphone application that integrates the services and manages ticketing and payment. Consequently, pure bundles for all transportation modes may not the

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Transportation service bundling – For whose benefit? Consumer valuation of pure bundling in the passenger transportation market

Guidon

Wicki

Bernauer

et al. 2020

Transportation Research Part A: Policy and Practice

View full text Add to dashboard Cite

show abstract

“…Bundling can involve product bundling or price bundling (Beheshtian-Ardakani et al 2018). Product bundling defines integrated products that provides extra value to the customers and price bundling consists of a package sold at a discount rate, without any integration of the goods and/or services involved (Adomavicius et al 2015;Giri et al 2020;Jeitschko et al 2017;Vamosiu 2018). In addition, depending on the number of items bundled, the nature of such items and the degree of variations, bundling can also reduce consumer costs (Yan et al 2014).…”

Section: Introductionmentioning

confidence: 99%

Product bundling and advertising strategy for a duopoly supply chain: a power-balance perspective

Jena

Ghadge

2020

Ann Oper Res

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The paper studies product bundling in a duopoly supply chain network under the influence of different power-balance structures, bundling decisions and advertising efforts on total supply chain profit. Mathematical models comprising two manufacturers and a single retailer are developed to capture the impact of bundling policy and advertisement strategy under three power-balance structures, namely Manufacturer Stackelberg, Retailer Stackelberg and Vertical Nash. Following game theory models and numerical examples, the study found that the total profit of the supply chain is undifferentiated under the manufacturer Stackelberg and Vertical Nash case in the manufacturer bundling and retailer bundling strategies. However, total supply chain profit under manufacturer bundling strongly dominates under retailer bundling in Retailer Stackelberg and Vertical Nash, and remains valid under multiple settings of market size, price elasticity and advertising elasticity. It is also found that manufacturer bundling is significantly affected by advertising effort compared to retailer bundling. The study contributes to the literature interfacing supply chain and marketing by studying bundling policy and advertising strategy simultaneously for homogenous products, under various power-balance structures and price competition.

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“…In addition, since most markets operate under some degree of competition, the absence of interfirm competition (e.g. Vamosiu, 2018aVamosiu, , 2018b is clearly a limitation of the analysis carried out here. These issues constitute promising areas for future research.…”

Section: Resultsmentioning

confidence: 99%

“…Such practices have been carried out in high-tech sectors, as was the case of product bundling by Microsoft (Stremersch and Tellis 2002;Peitz, 2008). In fact, bundling has been studied in the presence of different levels of market competition, including monopolies (Sheikhzadeh and Elahi, 2013;Li et al, 2013) and imperfectly competitive firms (Vamosiu, 2018a(Vamosiu, , 2018b.…”

Section: Introductionmentioning

confidence: 99%

The role of complementarity of goods in a mixed bundling strategy

Álvarez‐Albelo

2020

Econ Bus Lett

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This paper studies optimal pricing when a monopolist firm produces two complementary goods and may undertake a bundling strategy. To do so, a modified version of Yan and Bandyopadhyay’s (2011) framework is used, in which the efficacy of the bundling strategy depends positively on the degree of complementarity of goods. Two main results are obtained. First, mixed bundling turns out to be the optimal strategy for the firm, since it yields higher profits than pure unbundling and pure bundling. Second, sales and profits from the bundling (unbundling) strategy increase (decrease) as the products become more complementary, which entails an empirically sensible behavior.

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Optimal bundling under imperfect competition

Cited by 19 publications

References 21 publications

Transportation service bundling – For whose benefit? Consumer valuation of pure bundling in the passenger transportation market

Transportation service bundling – For whose benefit? Consumer valuation of pure bundling in the passenger transportation market

Product bundling and advertising strategy for a duopoly supply chain: a power-balance perspective

The role of complementarity of goods in a mixed bundling strategy

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