DOI: 10.1257/aeri.20220056 ISSN:
A Characterization for Optimal Bundling of Products with Nonadditive Values
Soheil Ghili- Management, Monitoring, Policy and Law
- Geography, Planning and Development
This paper studies the optimal bundling of products with nonadditive values. Under monotonic preferences and single-peaked profits, I show that a monopolist finds pure bundling optimal if and only if the optimal sales volume for the grand bundle is larger than the optimal sales volume for any smaller bundle. I then detail how my analysis relates to ratio monotonicity results on bundling and describe the implications for nonlinear pricing. (JEL D21, D42, L12, L25)