A Matching Model for Hardware and Software Bundles and an Application to the U.S. Home Video Game Industry

摘要

Bundling in hardware/software industries is increasingly common. Especially bundling hardware with digital content. However managerial questions regarding bundle formation have not been adequately explored. For example, how do managers on both the hardware and software side evaluate each other as potential bundle partners? We examine this question using a structural two-sided matching model to account for the simultaneous decisions being made by both the hardware and software providers to bundle (see Yang, Shi, and Goldfarb 2009).