EconPapers    
Economics at your fingertips  
 

Optimal Bundling Strategies For Complements And Substitutes With Heavy-Tailed Valuations

Rustam Ibragimov

No 2088, Harvard Institute of Economic Research Working Papers from Harvard - Institute of Economic Research

Abstract: We develop a framework that allows one to model the optimal bundling problem of a multiproduct monopolist providing interrelated goods with an arbitrary degree of complementarity or substitutability. Characterizations of optimal bundling strategies are derived for the seller in the case of long-tailed valuations and tastes for the products. We show, in particular, that if goods provided in a Vickrey auction or any other revenue equivalent auction are substitutes and bidders' tastes for the objects are not extremely heavy-tailed, then the monopolist prefers separate provision of the products. However, if the goods are complements and consumers' tastes are extremely thick- tailed, then the seller prefers providing the products on a single auction. We also present results on consumers' preferences over bundled auctions in the case when their valuations exhibit heavy-tailedness. In addition, we obtain characterizations of optimal bundling strategies for a monopolist who provides complements or substitutes for profit maximizing prices to buyers with long-tailed tastes.

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.economics.harvard.edu/pub/hier/2005/HIER2088.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.economics.harvard.edu/pub/hier/2005/HIER2088.pdf [301 Moved Permanently]--> https://www.economics.harvard.edu/pub/hier/2005/HIER2088.pdf [301 Moved Permanently]--> https://economics.harvard.edu/pub/hier/2005/HIER2088.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:fth:harver:2088

Access Statistics for this paper

More papers in Harvard Institute of Economic Research Working Papers from Harvard - Institute of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().

 
Page updated 2020-09-18
Handle: RePEc:fth:harver:2088