CFDP Update Date
February 26, 2021
This paper studies optimal bundling of products with inter-dependent values. I show that, under some conditions, a ﬁrm optimally chooses to sell only the full bundle of a given set of products if and only if the optimal sales volume of the full bundle is larger than the optimal sales volume for any smaller bundle. I then provide an interpretation of this characterization based on (i) the magnitude of the variation across consumers in how complementary they find different products, and (ii) how this variation correlates with price sensitivity.
Ghili, Soheil, "A Characterization for Optimal Bundling of Products with Inter-dependent Values" (2021). Cowles Foundation Discussion Papers. 2598.