Impact of channel structure on a manufacturer's bundling decision with an application to digital goods

• 成果类型: Article
• 署名作者: Cao, Qingning; Geng, Xianjun; Zhang, Jun
• 署名单位: Chinese Academy of Sciences; University of Science & Technology of China, CAS; Tulane University; Amazon.com
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13638
• 发表日期: 2022
• 页码: 1679-1697
• 关键词: Bundling; decentralized channel; digital goods

摘要

This paper studies the impact of channel structure on an upstream manufacturer's bundling incentive, with a focus on the implications of channel structure for bundling digital goods. We consider a distribution channel with a manufacturer and a retailer. The manufacturer produces two products and sells them either separately or in the form of bundles to end consumers through a downstream retailer. Our analysis reveals that a manufacturer may have a stronger incentive to bundle when selling through a downstream retailer than when selling directly to consumers. Bundling serves as a tool for the manufacturer to reduce the harm associated with the well-documented double marginalization problem. Therefore, our paper provides a new rationale to the bundling literature, which has traditionally focused on the role of bundling in helping a firm price-discriminate consumers or gain competitive advantages against peer firms. Further, contrary to the conventional wisdom that asymmetries in bundled products hurt a firm's bundling incentive, we show that asymmetries can strengthen the manufacturer's incentive to bundle in a distribution channel. We also find that, as the marginal production costs decrease, a decentralized channel structure is more likely to lead to manufacturer bundling than a centralized one. Our results help explain the prevalence of bundling, especially digital products, in practice.