Pricing a Package of Services - When (not) to bundle

Ketelaar, Felix and Szalay, Dezsö (December 2014): Pricing a Package of Services - When (not) to bundle. SFB/TR 15 Discussion Paper No. 487

Abstract

We study a tractable two-dimensional model of price discrimination. Consumers combine a rigid with a more flexible choice, such as choosing the location of a house and its quality or size. We show that the optimal pricing scheme involves no bundling if consumer types are affiliated. Conversely, if consumer types are negatively affiliated over some portion of types then some bundling occurs.

• Item Type: Paper
• Keywords: Price discrimination, Bundling, Monopoly, Multidimensional screening
• Faculties: Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems; Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A10 - Mehrdimensionale Anreizprobleme, Delegation und Kommunikation
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: D42, D82, D86
• Language: English