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Bundling without Price Discrimination

Author

Listed:
  • Carvajal, Andres
  • Rostek, Marzena
  • Weretka, Marek

Abstract

This 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.

Suggested Citation

  • Carvajal, Andres & Rostek, Marzena & Weretka, Marek, "undated". "Bundling without Price Discrimination," Economic Research Papers 271001, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:271001
    DOI: 10.22004/ag.econ.271001
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    References listed on IDEAS

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    1. Blundell,Richard & Newey,Whitney K. & Persson,Torsten (ed.), 2006. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521871525, November.
    2. Blundell,Richard & Newey,Whitney K. & Persson,Torsten (ed.), 2006. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9780521692083, November.
    3. Jean-Charles Rochet & Philippe Chone, 1998. "Ironing, Sweeping, and Multidimensional Screening," Econometrica, Econometric Society, vol. 66(4), pages 783-826, July.
    4. Weil, Philippe, 1992. "Equilibrium asset prices with undiversifiable labor income risk," Journal of Economic Dynamics and Control, Elsevier, vol. 16(3-4), pages 769-790.
    5. Jehiel, Philippe & Meyer-ter-Vehn, Moritz & Moldovanu, Benny, 2007. "Mixed bundling auctions," Journal of Economic Theory, Elsevier, vol. 134(1), pages 494-512, May.
    6. Manelli, Alejandro M. & Vincent, Daniel R., 2006. "Bundling as an optimal selling mechanism for a multiple-good monopolist," Journal of Economic Theory, Elsevier, vol. 127(1), pages 1-35, March.
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    Cited by:

    1. Pär Holmberg & Keith Ruddell & Bert Willems, 2025. "Multi-Product Supply Function Equilibria," Working Papers hal-05294356, HAL.
    2. Carvajal, Andrés & Rostek, Marzena & Sublet, Guillaume, 2018. "Information design and capital formation," Journal of Economic Theory, Elsevier, vol. 176(C), pages 255-292.

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    More about this item

    Keywords

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    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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