Products and Services Bundling Under Horizontal Market Competitions

Yimo Yu (), Zhitong Liao (), Qiaochu He () and Weiling Ke ()
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Yimo Yu: Southern University of Science and Technology
Zhitong Liao: Southern University of Science and Technology
Qiaochu He: Southern University of Science and Technology
Weiling Ke: Southern University of Science and Technology

Chapter Chapter 22 in City, Society, and Digital Transformation, 2022, pp 293-302 from Springer

Abstract: Abstract This paper investigates the impact of products and services bundling from the perspective of providers and customers by comparing the profit and consumer surplus under two scenarios where providers apply “fully compete” and “no bundle” strategies respectively. The result shows that higher customer value and congestion cost can benefit the providers under the “bundle ban” policy, while the service price greatly influences the profit distribution between products and services providers. Contrarily, the low customer value and congestion cost can benefit customers to some extent. Our study gives managerial insight to policymakers on how products and services bundling can achieve better social welfare under certain circumstances and help providers to execute proper strategies in a competitive market.

Keywords: Products and services bundling; Horizontal market; Market competition (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnopch:978-3-031-15644-1_22

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DOI: 10.1007/978-3-031-15644-1_22

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