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Bundling Strategy Of Healthcare Information Services With Network Externalities

Posted on:2019-05-19Degree:MasterType:Thesis
Country:ChinaCandidate:L XuFull Text:PDF
GTID:2439330590475577Subject:Logistics engineering
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Network externality arises when the utility of a healthcare information service depends not only on its attributes but also on the number of consumers who purchase the same service product.In order to study the bundling strategy with such network externality,the research considers two competitive healthcare service platform firms(platform A and B)who supply service to the market.Platform A provides basic service and value-added service,while platform B only supply basic service.Assume the quality level of platform A’s basic service may be higher or lower than that of platform B,and the overall quality level of platform A is higher than that of platform B.There are two sales strategies for platform A: one is to sell basic services and value-added services separately;the other is to bundle basic service and valueadded service.Based on above description,the study aims to analyze: 1)the company’s optimal sales strategy and pricing decision;2)differences in the company’s revenue,sales quantity and social welfare between two sales strategies;3)compatibility decision of basic service.It is found that in the case that the quality level of platform A’s basic service is higher than that of platform B,the optimal strategy for platform A is bundling strategy.If the strength of network externalities is low,in most cases,the social welfare of bundling strategy is higher than that of separating strategy.While the strength of network externalities increases,the social welfare of separating strategy increases and then surpasses that of bundling strategy.In the case that the quality level of platform A’s basic service is lower than that of platform B,the optimal sales strategy for platform A is bundling strategy only when the strength of network externalities is low and the quality difference between the basic services of two platforms is sufficient high.And the social welfare is larger under bundling strategy.As for compatibility decision,if platform A takes separate strategy and the quality level of platform A’s basic service is higher than that of platform B,then platform A and platform B can reach a compatibility agreement;when the quality of basic service of platform A is lower than that of platform B,then compatibility between basic services cannot be achieved.If platform A takes bundling strategy,the compatibility between basic services depends on the quality difference of service products.
Keywords/Search Tags:network externality, bundling strategy, healthcare information service, compatibility
PDF Full Text Request
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