EconPapers    
Economics at your fingertips  
 

Interpersonal Bundling

Yongmin Chen () and Tianle Zhang ()

Management Science, 2015, vol. 61, issue 6, 1456-1471

Abstract: This paper studies a model of interpersonal bundling, in which a monopolist offers a good for sale under a regular price and a group purchase discount if the number of consumers in a group—the bundle size—belongs to some menu of intervals. We find that this is often a profitable selling strategy in response to demand uncertainty, and it can achieve the highest profit among all possible selling mechanisms. We explain how the profitability of interpersonal bundling with a minimum or maximum group size may depend on the nature of uncertainty and on parameters of the market environment, and we discuss strategic issues related to the optimal design and implementation of these bundling schemes. Our analysis sheds light on popular marketing practices such as group purchase discounts, and it offers insights on potential new marketing innovation. This paper was accepted by J. Miguel Villas-Boas, marketing .

Keywords: interpersonal bundling; bundling; group purchase; group discount; demand uncertainty (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2014.2004 (application/pdf)

Related works:
Working Paper: Interpersonal Bundling (2014) Downloads
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:61:y:2015:i:6:p:1456-1471

Access Statistics for this article

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

 
Page updated 2020-05-20
Handle: RePEc:inm:ormnsc:v:61:y:2015:i:6:p:1456-1471