The Strategic Interplay Between Bundling and Merging in Complementary Markets

Mantovani, Andrea; Vandekerckhove, Jan

doi:10.1002/mde.2685

Cited by 10 publications

(2 citation statements)

References 46 publications

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“…Pan and Zhou [8] established a two-layer supply chain with bundling and pricing decisions and found that the manufacturer could earn more if he sells complementary products separately. Mantovani and Vandekerckhove [9] researched the strategies of merging and bundling decisions and showed that bundle strategy could not benefit the consumers because it brings surge in prices in their model. By calculating, R. et al [10] discussed the optimal bundling and pricing.…”

Section: Literature Reviewmentioning

confidence: 99%

Research on a Triopoly Dynamic Game with Free Market and Bundling Market in the Chinese Telecom Industry

Lou

2018

Discrete Dynamics in Nature and Society

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Based on the real situation of telecom industry in China, we establish a triopoly game model, which includes two competitive telecom firms and their correlative corporation which produces the complementary product. Both free market and bundling market will be concerned in this dynamic model. Moreover, we consider a one-to-many bundling way instead of two complementary products in terms of the proportion of one to one in a bundling product. By numerical simulation, we find that stable space will decrease and decision chaos appears when the degree of the competition becomes fierce between the two competitive telecom firms. Besides, increasing the amount of bundling services provided by a telecom firm can lead to different impacts on the prices of the three firms investigated. This paper enriches the decision-making for the strategy of bundling pricing and will be valuable for the telecom operators.

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Section: Literature Reviewmentioning

confidence: 99%

Research on a Triopoly Dynamic Game with Free Market and Bundling Market in the Chinese Telecom Industry

Lou

2018

Discrete Dynamics in Nature and Society

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“…Stigler (1963); Adams & Yellen (1976); Schmalensee (1984); Schmalensee (1982); McAfee, McMillan, & Whinston (1989); Mark Armstrong (1996); Bakos & Brynjolfsson (1999); Mark Armstrong & Vickers (2010); Chu, Leslie, & Sorensen (2011); Chen & Riordan (2013); M. Armstrong (2013); Mark Armstrong (2016). Papers addressing actual or potential strategic foreclosure include: Whinston (1990); Nalebuff (2004); Gans & King (2006); Choi (2008); Mialon (2014); Mantovani & Vandekerckhove (2016).…”

Section: Introductionmentioning

confidence: 99%

Bundling Information Goods and Access – Simulating Competition

Howell

Potgieter

2018

SSRN Journal

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We discuss the effect of pricing strategies by two firms on the total firm revenue, consumer and total welfare using simulation and numerical analysis. We consider pricing decisions for mixed bundling and where each firm offers two closely related products as well as a bundle. Bundling is a key feature for information goods (Bakos & Brynjolfsson, 1999; Shapiro & Varian, 1999) and we might assume that the market has two differentiated content products (each of which is a bundle of channels, for example, or a bundle of content titles to which access is sold). In many markets, this would be a basic entertainment product and then a sports product or a premium bundle with recent films etc. We can also consider this to be an access and a content product, to consider the issues around merger of content and access firms. In the model for this paper, we introduce a principle of bounded rationality by limiting the ability of the firms to determine revenue-maximising pricing strategies. That means that the firms are able to reduce their effort to find a revenue optimum and will in general find a relatively good solution only but not necessarily an optimum one. Considering the effects of this approach might be useful for both regulators and firms. We also assume that the firms collude to maximise their joint revenue, which we regard as a realistic supposition in a duopoly market. The model can be extended to cover the case where one firm offers/bundles more than two products but this is a topic for future research.

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