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Products and Services Bundling Under Horizontal Market Competitions

In: City, Society, and Digital Transformation

Author

Listed:
  • 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)

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.

Suggested Citation

  • Yimo Yu & Zhitong Liao & Qiaochu He & Weiling Ke, 2022. "Products and Services Bundling Under Horizontal Market Competitions," Lecture Notes in Operations Research, in: Robin Qiu & Wai Kin Victor Chan & Weiwei Chen & Youakim Badr & Canrong Zhang (ed.), City, Society, and Digital Transformation, chapter 0, pages 293-302, Springer.
    • Handle: RePEc:spr:lnopch:978-3-031-15644-1_22
    DOI: 10.1007/978-3-031-15644-1_22
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