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Bundling decisions for selling multiple objects

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  • Indranil Chakraborty

    ()
    (Department of Business Administration, ITAM Rio Hondo No.1, Col. Tizapan-San Angel, 01000 Mexico, D.F., MEXICO)

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.

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 13 (1999)
Issue (Month): 3 ()
Pages: 723-733

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Handle: RePEc:spr:joecth:v:13:y:1999:i:3:p:723-733

Note: Received: November 5, 1996; revised version: January 21, 1998
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Related research

Keywords: Auctions Bundling. ·;

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Cited by:
  1. Chow, YuenLeng & Yavas, Abdullah, 2008. "Auctions with Positive Synergies: Experimental Evidence," MPRA Paper 12669, University Library of Munich, Germany.
  2. Jehiel, Philippe & Meyer-Ter-Vehn, Moritz & Moldovanu, Benny, 2006. "Mixed Bundling Auctions," CEPR Discussion Papers 5566, C.E.P.R. Discussion Papers.
  3. Marco Pagnozzi, 2007. "Resale and Bundling in Auctions," CSEF Working Papers 186, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  4. Chakraborty, Indranil & Shyamalkumar, Nariankadu D., 2014. "Revenue and efficiency ranking in large multi-unit and bundle auctions," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 12-21.
  5. Chakraborty, Indranil, 2006. "Bundle and separate sales in auctions with entry," Games and Economic Behavior, Elsevier, vol. 54(1), pages 31-46, January.
  6. Luca Corazzini & Stefano Galavotti & Rupert Sausgruber & Paola Valbonesi, 2012. "Allotment In First-Price Auctions: An Experimental Investigation," "Marco Fanno" Working Papers 0153, Dipartimento di Scienze Economiche "Marco Fanno".
  7. Miravete, Eugenio J., 2011. "Convolution and composition of totally positive random variables in economics," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 479-490.
  8. Amar Cheema & Peter Leszczyc & Rajesh Bagchi & Richard Bagozzi & James Cox & Utpal Dholakia & Eric Greenleaf & Amit Pazgal & Michael Rothkopf & Michael Shen & Shyam Sunder & Robert Zeithammer, 2005. "Economics, Psychology, and Social Dynamics of Consumer Bidding in Auctions," Marketing Letters, Springer, vol. 16(3), pages 401-413, December.
  9. Philippe Jehiel & Benny Moldovanu, 2005. "Allocative and Informational Externalities in Auctions and Related Mechanisms," Levine's Bibliography 784828000000000490, UCLA Department of Economics.
  10. Brendstrup, Bjarne & Paarsch, Harry J., 2007. "Semiparametric identification and estimation in multi-object, English auctions," Journal of Econometrics, Elsevier, vol. 141(1), pages 84-108, November.
  11. Dassiou, Xeni & Glycopantis, Dionysius, 2008. "Price discrimination through transactions bundling: The case of monopsony," Journal of Mathematical Economics, Elsevier, vol. 44(7-8), pages 672-681, July.
  12. Rustam Ibragimov, 2004. "Shifting paradigms: on the robustness of economic models to heavy-tailedness assumptions," Econometric Society 2004 Latin American Meetings 105, Econometric Society.
  13. Dejan Trifunović & Bojan Ristić, 2013. "Multi-Unit Auctions In The Procurement Of Electricity," Economic Annals, Faculty of Economics, University of Belgrade, vol. 58(197), pages 47-78, April –.
  14. Simon Board, 2009. "Revealing information in auctions: the allocation effect," Economic Theory, Springer, vol. 38(1), pages 125-135, January.

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