Bundling Information Goods of Decreasing Value

Xianjun Geng (), Maxwell Stinchcombe () and Andrew B. Whinston ()
Additional contact information
Xianjun Geng: Department of Management Science, University of Washington Business School, Seattle, Washington 98195
Andrew B. Whinston: Department of Management Science and Information Systems, The University of Texas at Austin, Austin, Texas 78712

Management Science, 2005, vol. 51, issue 4, 662-667

Abstract: Consumers' average value for information goods, websites, weather forecasts, music, and news declines with the number consumed. This paper provides simple guidelines to optimal bundling marketing strategies in this case. If consumers' values do not decrease too quickly, we show that bundling is approximately optimal. If consumers' values to subsequent goods decrease quickly, we show by example that one should expect bundling to be suboptimal.

Keywords: bundling; electronic commerce; price discrimination; digital products (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (43)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.1040.0344 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:51:y:2005:i:4:p:662-667

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().