Price Discrimination Through Commodity Bundling

Price discrimination through communication

We study a seller’s optimal mechanism for maximizing revenue when a buyer may present evidence relevant to her value. We show that a condition very close to transparency of buyer segments is necessary and sufficient for the optimal mechanism to be deterministic–hence akin to classic third degree price discrimination–independently of non-evidence characteristics. We also find another sufficient ...

A more general theory of commodity bundling

This paper discusses the incentive to bundle when consumer valuations are nonadditive and/or when products are supplied by separate sellers. Whether integrated or separate, firms have an incentive to introduce a bundle discount when demand for the bundle is elastic relative to demand for stand-alone products. A simple formula is derived for when an integrated firm supplying substitute products ...

Commodity Bundling and the Burden of Monopoly

Price Discrimination through Corporate Social Responsibility

A common form of Corporate Social Responsibility (CSR) by firms is to agree to donate a fixed portion of private good revenues to a charitable cause. In this paper we explore a new rationale for such CSR. We argue that linking private good purchase with charitable donations allows the firm to price discriminate between altruistic consumers who wish to make charitable donations out of their inco...

Price Bundling in Competitive Markets: