Hemant K. Bhargava is at the UC Davis Graduate School of Management and will be coming to campus for a CRS Seminar Monday, November 18.
Paper Title: "Multi-Platform Digital Strategy: Bundling of Substitutable and Differentiated Goods"
Abstract: "The distribution and consumption of media, entertainment, software, and other information goods has transformed in recent years. Consumers demand access on multiple platforms, and content providers have responded with different strategies, ranging from independent pricing on each platform to a single price for access to all platforms. I frame the multi-platform design problem as a choice between pure bundling (one price gets both platforms), mixed bundling (price each platform separately, and offer discount for getting both) and partial bundling (one platform is sold separately and also bundled with the second). When one platform is considered superior by all customers, then multi-platform discounts help the firm if higher-value customers have greater propensity for multi-platform access; the choice of bundling strategy depends on certain ratios of valuations and contingent valuations for the two platforms. When consumer valuations for the traditional and emerging platforms are mutually independent, then a full mixed bundling is optimal when the demand profiles for the two platforms are relatively similar; otherwise, it is optimal to sell bundle access to the weaker platform into the price for the superior platform while also selling the weaker platform separately. When platforms behave more like substitutes, then such partial bundling is less likely to be optimal."