Browsing by Author "Chung, Hui-Ling"

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Bundling strategy and product differentiation
(2013-04-01)
Chung, Hui-Ling
;
Lin, Yan-Shu
;
Hu, Jin-Li
;
經營管理研究所
;
Institute of Business and Management
The existing literature shows that a decrease in the degree of substitutability increases a monopoly's incentive to bundle. This paper in addition takes into account competition in the second product market and then re-examines how intra-brand and inter-brand product differentiations affect the incentive to bundle. In order to formally examine the above conjectures, this research builds up a two-firm, two-product model in which product 1 (monopoly product) is produced only by the bundling firm and product 2 (competing product) is produced by both firms. The analysis shows that under both Bertrand and Cournot competitions the incentive to bundle does not necessarily increase with the degree of intra-brand differentiation, while it strictly decreases with the degree of inter-brand differentiation. Moreover, under Bertrand competition bundling always decreases consumer surplus, but may increase the competitor's profit and social surplus. Under Cournot competition bundling always reduces the opponent's profit and social welfare, but may increase consumer surplus.
BUNDLING WITH QUALITY CHOICE
(2014-12-01)
Chung, Hui-Ling
;
Chen, Hung-Yi
;
Hu, Jin-Li
;
Lin, Yan-Shu
;
經營管理研究所
Antitrust authorities consider commodity bundling as an extension of monopoly power to other markets which harms consumers. This paper analyzes quality competition and its effect on consumer surplus for the case of commodity bundling by a multi-product firm in a vertically differentiated industry. When the firm bundles a high quality good, we show that bundling negatively affects the quality of a competing good, consumer surplus, and welfare. When the firm bundles a low quality good instead, bundling raises the quality of a competing good, enhances consumer surplus, and may increase the welfare.