Bundling decisions for selling multiple objects
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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Volume (Year): 13 (1999)
Issue (Month): 3 ()
|Note:||Received: November 5, 1996; revised version: January 21, 1998|
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