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A Characterization for Optimal Bundling of Products with Non-Additive Values
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A Characterization for Optimal Bundling of Products with Non-Additive Values
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This paper studies optimal bundling of products with non-additive values. Under monotonic preferences and single-peaked profits, I show 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 (i) detail how my analysis relates to "ratio monotonicity" results on bundling; and (ii) describe the implications for non-linear pricing.
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