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)

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