Take Action

Home | Faculty & Research Overview | Research

Research Details

The Role of Services: Pricing, Product Line, and Durability


In recent times due to the commoditization of goods, many traditional firms often offer services as well. In this paper, we study the role of services apart from being another revenue source and understand how to manage services. We first understand their role in pricing of the underlying good. Next we study the impact of services on good variety offered by the firm. Lastly, we study the impact of services on markets of durable goods with its specific characteristics. We characterize the optimal behavior of the firm and relate that to concepts of bundling and market segmentation. We show that existence of services help firms offer a wider variety of underlying goods. Further, we show that in the market of durable goods, offering service resolve some of key problems such as time inconsistency.


Working Paper


Gad Allon, Achal Bassamboo

Date Published



Allon, Gad, and Achal Bassamboo. 2007. The Role of Services: Pricing, Product Line, and Durability.


Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more


Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.


Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more