A Characterization for Optimal Bundling of Products with Nonadditive Values

Soheil Ghili

American Economic Review: Insights, 2023, vol. 5, issue 3, 311-26

Abstract: This paper studies the optimal bundling of products with nonadditive values. Under monotonic preferences and single-peaked profits, I show that a monopolist finds pure bundling optimal if and only if the optimal sales volume for the grand bundle is larger than the optimal sales volume for any smaller bundle. I then detail how my analysis relates to ratio monotonicity results on bundling and describe the implications for nonlinear pricing.

JEL-codes: D21 D42 L12 L25 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1257/aeri.20220056

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