Discussion paper

DP10313 Pricing a Package of Services

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.

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Citation

Szalay, D (2014), ‘DP10313 Pricing a Package of Services‘, CEPR Discussion Paper No. 10313. CEPR Press, Paris & London. https://cepr.org/publications/dp10313