Bundling Strategies When Products Are Vertically Differentiated and Capacities Are Limited

We consider a seller who owns two capacity-constrained resources and markets two products (components) corresponding to these resources as well as a bundle comprising the two components. In an environment where all customers agree that one of the two components is of higher quality than the other and that the bundle is of the highest quality, we derive the seller's optimal bundling strategy. We demonstrate that the optimal solution depends on the absolute and relative availabilities of the two resources as well as upon the extent of subadditivity of the quality of the products. The possible strategies that can arise as equilibrium behavior include a pure components strategy, a partial- or full-spectrum mixed bundling strategy, and a pure bundling strategy, where the latter strategy is optimal when capacities are unconstrained. These conclusions are contrary to findings in the prior literature on bundling that demonstrated the unambiguous dominance of the full-spectrum mixed bundling strategy. Thus, our work expands the frontier of bundling to an environment with vertically differentiated components and limited resources. We also explore how the bundling strategies change as we introduce an element of horizontal differentiation wherein different types of customers value the available components differently.

Estimates of Use of Research-Based Instructional Strategies in Core Electrical or Computer Engineering Courses

Many research-based instruction strategies (RBISs) have been developed; their superior efficacy with respect to student learning has been demonstrated in many studies. Collecting and interpreting evidence about: 1) the extent to which electrical and computer engineering (ECE) faculty members are using RBISs in core, required engineering science courses, and 2) concerns that they express about using them, are important aspects of understanding how engineering education is evolving. The authors surveyed ECE faculty members, asking about their awareness and use of selected RBISs. The survey also asked what concerns ECE faculty members had about using RBISs. Respondent data showed that awareness of RBISs was very high, but estimates of use of RBISs, based on survey data, varied from 10% to 70%, depending on characteristics of the strategy. The most significant concern was the amount of class time that using an RBIS might take; efforts to increase use of RBISs must address this.