Bundling without Price Discrimination
AbstractThis paper examines the optimal bundling strategies of a multiproduct monopoly in markets in which a seller cannot monitor and thereby restrict the purchases of buyers to a single bundle, while buyers have resale opportunities. In such markets, the standard mechanism through which bundling increases seller profits, based on price discrimination, is not feasible. The profit-maximizing bundling strategy is characterized, given the restrictions on pricing policies resulting from resale and a lack of monitoring. The welfare implications of optimal bundling are analyzed.
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Bibliographic InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 936.
Date of creation: 2010
Date of revision:
Bundling ; Pricing ; Revenue Maximization ; Product Design JEL Codes: D42 ; L12;
Find related papers by JEL classification:
- Pro - Economic Systems - - - - -
- Des - Microeconomics - - - - -
- JEL - Labor and Demographic Economics - - - - -
- Cod - Mathematical and Quantitative Methods - - - - -
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-18 (All new papers)
- NEP-COM-2010-06-18 (Industrial Competition)
- NEP-IND-2010-06-18 (Industrial Organization)
- NEP-MKT-2010-06-18 (Marketing)
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