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When Is Pure Bundling Optimal?

Author

Listed:
  • Nima Haghpanah
  • Jason Hartline

Abstract

We study when pure bundling, i.e., offering only the grand bundle of all products, is optimal for a multi-product monopolist. Pure bundling is optimal if consumers with higher values for the grand bundle have higher relative values for smaller bundles compared to the grand bundle. Conversely, pure bundling is not optimal if consumers with higher values for the grand bundle have lower relative values. We prove the results by decomposing the problem into simpler ones in which types can be ranked according to their values for the grand bundle.

Suggested Citation

  • Nima Haghpanah & Jason Hartline, 2021. "When Is Pure Bundling Optimal?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(3), pages 1127-1156.
    • Handle: RePEc:oup:restud:v:88:y:2021:i:3:p:1127-1156.
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    File URL: http://hdl.handle.net/10.1093/restud/rdaa053
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    Citations

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    Cited by:

    1. Paolo Roma & Tiziana D’Alfonso & Sabrina Auci, 2026. "Monopoly Versus Duopoly in Sports Broadcasting: Consumer Surplus Implications," Journal of Sports Economics, , vol. 27(5), pages 528-547, June.
    2. Kento Hashimoto & Keita Kuwahara & Reo Nonaka, 2025. "Selling Multiple Items to a Unit-Demand Buyer via Automated Mechanism Design," Papers 2502.10086, arXiv.org, revised Jan 2026.
    3. Andreas Kleiner, 2022. "Optimal Delegation in a Multidimensional World," Papers 2208.11835, arXiv.org.
    4. Kolagani Paramahamsa, 2026. "Screening with Advertisements," Papers 2601.22404, arXiv.org.
    5. Hedyeh Beyhaghi & Linda Cai & Yiding Feng & Yingkai Li & S. Matthew Weinberg, 2025. "Competition Complexity in Multi-Item Auctions: Beyond VCG and Regularity," Papers 2506.09291, arXiv.org.
    6. Soheil Ghili & Russ Yoon, 2023. "An Empirical Analysis of Optimal Nonlinear Pricing in Business-to-Business Markets," Papers 2302.11643, arXiv.org, revised Aug 2024.
    7. Saeed Alaei & Ali Makhdoumi & Azarakhsh Malekian & Saša Pekeč, 2022. "Revenue-Sharing Allocation Strategies for Two-Sided Media Platforms: Pro-Rata vs. User-Centric," Management Science, INFORMS, vol. 68(12), pages 8699-8721, December.
    8. Nicholas C Bedard & Jacob K Goeree & Ningyi Sun, 2023. "Multivariate Majorization in Principal-Agents Models," Papers 2308.13804, arXiv.org.
    9. Saeed Alaei & Ali Makhdoumi & Azarakhsh Malekian, 2023. "Optimal Subscription Planning for Digital Goods," Operations Research, INFORMS, vol. 71(6), pages 2245-2266, November.
    10. Frank Yang, 2026. "Screening Frontiers," Papers 2602.20087, arXiv.org, revised Aug 2026.
    11. Dirk Bergemann & Yang Cai & Grigoris Velegkas & Mingfei Zhao, 2022. "Is Selling Complete Information (Approximately) Optimal?," Cowles Foundation Discussion Papers 2324, Cowles Foundation for Research in Economics, Yale University.
    12. Weijie Zhong, 2026. "Bundling Complements," Papers 2607.07982, arXiv.org, revised Sep 2026.
    13. Richard Archer & Soheil Ghili & Nima Haghpanah, 2026. "Pay-Per-Crawl Pricing for AI: The LM-Tree Agent," Papers 2604.01416, arXiv.org.
    14. Frank Yang, 2021. "Costly Multidimensional Screening," Papers 2109.00487, arXiv.org, revised Sep 2025.
    15. Hailong Sun & Xiaobo Li & Chung-Piaw Teo, 2025. "Partition and Prosper: Design and Pricing of Single Bundle," Operations Research, INFORMS, vol. 73(4), pages 1983-2001, July.
    16. Alireza Fallah & Michael I. Jordan & Ali Makhdoumi & Azarakhsh Malekian, 2024. "The Limits of Price Discrimination Under Privacy Constraints," Papers 2402.08223, arXiv.org, revised Jun 2024.
    17. Alexander V. Kolesnikov & Fedor Sandomirskiy & Aleh Tsyvinski & Alexander P. Zimin, 2022. "Beckmann's approach to multi-item multi-bidder auctions," Papers 2203.06837, arXiv.org, revised Sep 2022.
    18. Zhiming Feng, 2025. "A Constructive Characterization of Optimal Bundling," Papers 2502.07863, arXiv.org, revised Jul 2026.
    19. Ostrizek, Franz & Sartori, Elia, 2023. "Screening while controlling an externality," Games and Economic Behavior, Elsevier, vol. 139(C), pages 26-55.
    20. Patrick Lahr & Axel Niemeyer, 2024. "Extreme Points in Multi-Dimensional Screening," Papers 2412.00649, arXiv.org, revised Oct 2025.
    21. Bikhchandani, Sushil & Mishra, Debasis, 2022. "Selling two identical objects," Journal of Economic Theory, Elsevier, vol. 200(C).
    22. Carmen D. Álvarez-Albelo & José Alberto Martínez-González, 2025. "Should bundling agreements between rival firms involve persuasive advertising differentiation?," Journal of Economics, Springer, vol. 144(3), pages 247-268, April.
    23. Eric Gao, 2025. "Multidimensional Sequential Screening," Papers 2512.23274, arXiv.org, revised May 2026.
    24. Richard Archer & Soheil Ghili & Nima Haghpanah, 2026. "Pay-Per-Crawl Pricing for AI: The LM-Tree Agent," Cowles Foundation Discussion Papers 2516, Cowles Foundation for Research in Economics, Yale University.

    More about this item

    Keywords

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    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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