Optimal Customized Bundle Pricing for Information Goods
نویسندگان
چکیده
In this paper, we provide a model for choosing the optimal number of bundles and their prices in the context of designing markets for information goods. Selling bundled goods is a widespread phenomenon, and a recent paper by Bakos and Brynjolfsson (1999) showed that under conditions of zero marginal cost, and independent and identically distributed customer valuations, pure bundling is optimal for a multi-product monopolist. In this paper, we show, using a nonlinear programming framework and numerical analyses, that in many cases, even with iid customers and zero marginal cost, offering multiple customized bundles may be better. In cases with non-iid customers, offering different customized bundles is clearly optimal; a pure bundling approach may lead to significant loss of profit.
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