DP10313 Pricing a Package of Services
|Author(s):||Felix Ketelaar, Dezso Szalay|
|Publication Date:||December 2014|
|Keyword(s):||Bundling, Monopoly, Multidimensional screening, Price discrimination|
|JEL(s):||D42, D82, D86|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=10313|
We study a tractable two-dimensional model of price discrimination. Consumers combine a rigid with a more flexible choice, such as choosing the location of a house and its quality or size. We show that the optimal pricing scheme involves no bundling if consumer types are affiliated. Conversely, if consumer types are negatively affiliated over some portion of types then some bundling occurs.