Talk:Product bundling/Archives/2016

Dr. Chen's comment on this article

Dr. Chen has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"In marketing, product bundling..." I would say "In economics and marketing, product bundling..." Bundling has been studied extensively by economists. In fact, some of the most important contributors to the literature on product bundling have been economists.

An important determinant of the profitability of bundling is the dependence relations between consumer values for different products. Stigler (1963) showed with a simple example that, when consumer values for two products are perfectly negatively dependent, bundling can be profitable even without demand complementarity or scope economies. Adams and Yellen (1976) expanded on this view, showing mostly with examples that mixed bundling can be a profitable way to segment markets. Schmalensee (1984), Long (1984), and McAfee, McMillan, and Whinston (1989) provided broad conditions under which bundling dominates separate selling. Chen and Riordan (2013) showed more generally that bundling is profitable when consumer values for two products are negatively dependent, independent, or have sufficiently limited positive dependence.

The issue of how product bundling may affect competition has attracted much attention from economists and policy makers. The leverage theory views bundling as a mechanism for a firm with market power in one market to use the leverage provided by this power to foreclose sales in, and thereby monopolize, a second market (Whinston, 1990). However, there are also situations where product bundling may emerge as an equilibrium strategy of competing firms for its role as a product differentiation device: by bundling with different products, firms competing in a primary market can increase their product differentiation and soften price competition (Chen, 1997). Product bundling may thus have anticompetitive effects through either market foreclosure or market accommodation.

References:

Adams, W. J. and J. L. Yellen, "Commodity Bundling and the Burden of Monopoly," Quarterly Journal of Economics 90 (1976), 475-498.

Chen, Y., "Equilibrium Product Bundling," Journal of Business 70 (1997), 85-103.

Chen, Y. and M. Riordan. “Profitability of Product Bundling”, International Economic Review, Vol. 54(1), 35-57, 2013.

Long, J. B. Jr., "Comments on 'Gaussian Demand and Commodity Bundling," Journal of Business 57 (1984), S235-S246.

McAfee, R. P., J. McMillan, and M. D. Whinston, "Multiproduct Monopoly, Commodity Bundling, and Correlation of Values," Quarterly Journal of Economics 104 (1989), 371-383.

Schmalensee, R., "Gaussian Demand and Commodity Bundling," Journal of Business 57 (1984), S211-S230.

Stigler, G., "A Note on Block Booking," U.S. Supreme Court Review (1963), 152-175.

Whinston, M. D., "Tying, Foreclosure, and Exclusion," American Economic Review

80 (1990), 837-859.

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Dr. Chen has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference 1: Chen, Yongmin & Li, Jianpei, 2015. "Bundled procurement," MPRA Paper 63423, University Library of Munich, Germany.

• Reference 2: Chen, Yongmin & Zhang, Tianle, 2014. "Interpersonal Bundling," MPRA Paper 56165, University Library of Munich, Germany.

ExpertIdeasBot (talk) 13:02, 7 June 2016 (UTC)

Dr. Jeitschko's comment on this article

Dr. Jeitschko has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

There is a recent important trend that should also be discussed, which is that bundlers sometimes bundle products from across firms, and sometimes firms cooperate on bundling strategies. This can then also take the form of specific joint marketing agreements that market bundles of products of distinct firms. This is often the case in tourism, where package deals (bundles) include components from different firms, e.g., hotels, flight, car rental, but also entertainment, such as restaurant discounts that apply only to people who also purchase other offers. Many examples -- and the implications of this type of bundling -- are discussed in Jeitschko, T., Y Jung, and J. Kim, "Bundling and Joint Marketing by Rival Firms." DICE Discussion Paper, 114, 2014; available here: http://www.dice.hhu.de/fileadmin/redaktion/Fakultaeten/Wirtschaftswissenschaftliche_Fakultaet/DICE/Discussion_Paper/144_Jeitschko_Jung_Kim.pdf

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

We believe Dr. Jeitschko has expertise on the topic of this article, since he has published relevant scholarly research:

• Reference : Jeitschko, Thomas D. & Jung, Yeonjei & Kim, Jaesoo, 2014. "Bundling and joint marketing by rival firms," DICE Discussion Papers 144, HeinrichHeineUniversitat Dusseldorf, Dusseldorf Institute for Competition Economics (DICE).

ExpertIdeasBot (talk) 18:59, 30 August 2016 (UTC)