Bundling decisions for selling multiple objects

Indranil Chakraborty (indro@nus.edu.sg)

Economic Theory, 1999, vol. 13, issue 3, 723-733

Abstract: Auctioneers often face the decision of whether to bundle two or more different objects before selling them. Under a Vickrey auction (or any other revenue equivalent auction form) there is a unique critical number for each pair of objects such that when the number of bidders is fewer than that critical number the seller strictly prefers a bundled sale and when there are more bidders the seller prefers unbundled sales. This property holds even when the valuations for the objects are correlated for a given bidder. The results have been proved using a mathematical technique of quantiles that can be extremely useful for similar analysis.

Keywords: Auctions; Bundling.; · (search for similar items in EconPapers)
Date: 1999-04-15
Note: Received: November 5, 1996; revised version: January 21, 1998
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Citations: View citations in EconPapers (42)

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