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Indiana University Bloomington

Doctoral Programs

1960 Notable

From 1960-2013, we prepared nearly 1,200 men and women
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Journal Articles

Does Service Bundling Reduce Churn?

2014, Journal of Economics and Management Strategy

Jeff Prince, Shane Greenstein

Abstract

We examine whether bundling in telecommunications services reduces churn using a series of large, independent cross sections of household decisions. To identify the effect of bundling, we construct a pseudo-panel dataset and utilize a linear, dynamic panel-data model, supplemented by nearest-neighbor matching. We find bundling does reduce churn for all three “triple-play” services. The effect is only “visible” during times of turbulent demand. We also find evidence that broadband was substituting for pay television in 2009. This analysis highlights that bundling helps with customer retention in service industries, and may play an important role in preserving contracting markets.

Citation

Prince, Jeff, and Shane Greenstein (2014), "Does Service Bundling Reduce Churn?" Journal of Economics and Management Strategy, Vol. 23, No. 4, pp. 839-875.