This paper provides a new rationale for bundling based on informational leverage. It is demonstrated that physically tying a product of established quality to one of unknown quality may mitigate the problem of asymetric information encountered in the latter market. Leveraging reputation in one market to provide information about product quality in a second market can have profound implications for the timing of new product introductions.
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Paper provided by Columbia University, Department of Economics in its series Discussion Papers with number
1996_03.