Pure vs. mixed commodity bundling

  title={Pure vs. mixed commodity bundling},
  author={Brooks Pierce and Harold Winter},
  journal={Review of Industrial Organization},
In the commodity bundling literature, pure bundling is ruled out as a uniquely optimal strategy because mixed bundling is always (weakly) better. This paper provides a theoretical distinction between the two pricing schemes. The distinction relies on the degree of consumer heterogeneity in reservation prices. While there is a lack of empirical evidence on commodity bundling pricing schemes due to the difficulties in measuring consumer heterogeneity, we circumvent this problem by examining firm… Expand
Sell by bundle or unit?: Pure bundling versus mixed bundling of information goods
This paper extends prior research on bundling and allows for consumer heterogeneity along a single attribute of the consumer, however, an individual consumer's demand function can be expressed as the interaction of the intercept and the slope of the demand function. Expand
Option Package Bundling
This paper analyzes the optimality of package bundling by focusing on the ?main and accessory?relationship between two goods. In particular, we consider option package bundling in which an optionalExpand
Online sequential bundling: profit analysis and practice
We investigate monopoly profit under a new online tying strategy, namely sequential bundling. This method allows customers to buy additional products at discounted prices immediately after purchasingExpand
Pricing bundled information goods
  • K. Altinkemer, J. Jaisingh
  • Business, Computer Science
  • Proceedings Fourth IEEE International Workshop on Advanced Issues of E-Commerce and Web-Based Information Systems (WECWIS 2002)
  • 2002
Results suggest that a profit-maximizing firm should offer only the largest bundle, containing all the information Goods, when the marginal cost of the physical good was low (high). Expand
Digital bundling
It is found that when costs do not increase relative to the bundle valuation, firms find it beneficial to limit the number of bundles offered in the market and bundling becomes an inferior strategy. Expand
Pricing Strategies of Unbundling and Mixed-Bundling in a Two-Sided Market Under Stochastic Demand
We investigate the pricing strategies of unbundling and mixed-bundling for a firm that produces both a product and a compatible integrated content, respectively. The firm can be viewed as a two-sid...
A Welfare Evaluation of Tying Strategies
We compare monopoly profit, consumer surplus, and total welfare associated with three commonly used tying strategies: no tying, pure tying, and mixed tying. Whereas the previous literature focusedExpand
Bundling under Vertical Product Differentiation
Abstract This paper builds up a two-firm, two-product model, in order to analyze the effects of bundling on the competitor's profit, consumer surplus, and social welfare, when the bundler is a high-Expand
Does Economics Provide a Reliable Guide to Regulating Commodity Bundling by Firms? A Survey of the Economic Literature
This article surveys the voluminous economic literature on commodity bundling. While bundling has been widely studied, the vast majority of the papers are theoretical models of bundling. These modelsExpand
Pricing and Product-bundling Strategies for E-commerce Platforms with Competition
The results reveal that the mixed product-bundling strategy can be used as a strategic competitive tool for the competing platforms to seize more market share and induce the platforms to subsidize customers who buy the bundle by charging customers who only access the platforms (without bundling) a higher price. Expand


Multiproduct Monopoly, Commodity Bundling, and Correlation of Values
Through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers' preferences is limited? One possibility, extensively studied in theExpand
Commodity Bundling and the Burden of Monopoly
I. Introduction, 475.—II. The model: positive properties, 477.—III. The model: normative properties, 490.—IV. Implications and conclusion, 495.
FOR VARIOUS REASONS, data availability being not the least of these, empirical studies of production processes can often be carried out more conveniently in terms of cost functions instead ofExpand