IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Optimal Bundling Strategies For Complements And Substitutes With Heavy-Tailed Valuations

Listed author(s):
  • Rustam Ibragimov

We develop a framework that allows one to model the optimal bundling problem of a multiproduct monopolist providing interrelated goods with an arbitrary degree of complementarity or substitutability. Characterizations of optimal bundling strategies are derived for the seller in the case of long-tailed valuations and tastes for the products. We show, in particular, that if goods provided in a Vickrey auction or any other revenue equivalent auction are substitutes and bidders' tastes for the objects are not extremely heavy-tailed, then the monopolist prefers separate provision of the products. However, if the goods are complements and consumers' tastes are extremely thick- tailed, then the seller prefers providing the products on a single auction. We also present results on consumers' preferences over bundled auctions in the case when their valuations exhibit heavy-tailedness. In addition, we obtain characterizations of optimal bundling strategies for a monopolist who provides complements or substitutes for profit maximizing prices to buyers with long-tailed tastes.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 2088.

in new window

Date of creation: 2005
Handle: RePEc:fth:harver:2088
Contact details of provider: Postal:
200 Littauer Center, Cambridge, MA 02138

Phone: 617-495-2144
Fax: 617-495-7730
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fth:harver:2088. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.