When Is Pure Bundling Optimal?
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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 value for the grand bundle have lower relative disutility for consuming smaller bundles. Conversely, pure bundling is not optimal if consumers with higher value for the grand bundle have higher relative disutility for consuming smaller bundles. We prove the results using a decomposition approach that relies on identifying binding incentive constraints with multi-dimensional heterogeneity.
Date: 26 October 2018, 14:00
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room A
Speaker: Nima Haghpanah (Penn State University)
Organising department: Department of Economics
Part of: Nuffield Economic Theory Seminar
Booking required?: Not required
Audience: Members of the University only
Editors: Erin Saunders, Melis Clark