On 14th January 2019 (1-2pm) Xinyu Li, postdoctoral researcher at the University Of Groningen, will give a presentation about “Bundling in maintenance contracts” in Q4.245. Afterwards, Mr. Li will be available for questions and discussions. His presentation is part of: https://wiwi.uni-paderborn.de/dep1/me/research/discussing-research/seam/
An owner buys a machine from a manufacture. The purchase includes a free maintenance service in the warranty period. When the warranty expires, the owner could buy the maintenance service from the manufacture or a third-party provider. This paper investigates the owner's bundling decision during a procurement auction for maintenance service consisting of two sequential periods, in which the manufacture's choice of machine quality in the first period influences every provider's maintenance cost in the second period and the learning-by-doing effect exists. We show that the owner prefers bundling if the learning-by-doing effect dominates the competition effect driven by a large number of third-party providers; otherwise, the owner favors unbundling.