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Kumar, Vineet

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Kumar

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Vineet

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Kumar, Vineet
Author's Publications: search.filters.isAuthorOfPublication.c1897df6-c733-4005-917e-4e570acd1b76

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    Structural Models of Complementary Choices
    (2014) Berry, Steven; Khwaja, Ahmed; Kumar, Vineet; Musalem, Andres; Wilbur, Kenneth C.; Allenby, Greg; Anand, Bharat; Chintagunta, Pradeep; Hanemann, W. Michael; Jeziorski, Przemek; Mele, Angelo
    Complementary choices are important and pervasive yet occasionally elusive. Single consumers make complementary choices in purchase decisions (e.g., chips and salsa), product inter-operabilities (smartphones and networks), and dynamic decisions (current exercise and future healthcare consumption). Multiple consumers make complementary choices when they interact in strategic games or form networks. Firms make complementary choices when determining production inputs, entering related markets, and strategic mergers.
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    The Dynamic Effects of Bundling as a Product Strategy
    (2013-10-07) Derdenger, Timothy; Kumar, Vineet
    Several key questions in bundling have not been empirically examined: Is mixed bundling more effective than pure bundling or pure components? Does correlation in consumer valuations make bundling more or less effective? Does bundling serve as a complement or substitute to network effects? To address these questions, we develop a consumer-choice model from micro-foundations to capture the essentials of our setting, the handheld video game market. We provide a framework to understand the dynamic, long-term impacts of bundling on demand. The primary explanation for the profitability of bundling relies on homogenization of consumer valuations for the bundle, allowing the firm to extract more surplus. We find bundling can be effective through a novel and previously unexamined mechanism of dynamic consumer segmentation, which operates independent of the homogenization effect, and can in fact be stronger when the homogenization effect is weaker. We also find that bundles are treated as separate products (distinct from component products) by consumers. Sales of both hardware and software components decrease in the absence of bundling, and consumers who had previously purchased bundles might delay purchases, resulting in lower revenues. We also find that mixed bundling dominates pure bundling and pure components in terms of both hardware and software revenues. Investigating the link between bundling and indirect network effects, we find that they act as substitute strategies, with a lower relative effectiveness for bundling when network effects are stronger.