Warranty and Bundling Strategies for Pricing Decisions in a Duopoly

This study examines pricing decisions by considering two manufacturers’ warranty and bundling strategies using spatial competition in a duopolistic market. With the development of advanced technology evolving societal needs, manufacturers now sell product with its complement—a warranty—using either bundled base or an unbundled extended strategy. To investigate impact strategy on models, we develop scenarios for pure mixed scenarios. By constructing Nash equilibrium model assessing customer preferences, determine optimal length level demand corresponding to manufacturer’s strategic decisions. The analysis demonstrates that one are interdependent those competitor. Moreover, longer period not only attracts customers increases but also imposes additional costs manufacturers. As result, while providing more personalized features flexibility, is always profitable. Thus, manufacturer must carefully evaluate when making gain competitive advantage. Finally, numerical sensitivity analyzes confirm results theoretical provide managerial insights.