Product bundling or reserved product pricing?
Price discrimination with myopic and strategic consumers
英国爱丁堡大学（University of Edinburgh）商学院
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Mixed bundling (MB), in which products are sold separately and as a bundle, is a form of second degree price discrimination. In this study we examine how MB and its variants compare against reserved product pricing (RPP), a form of co-promotion. Used by Amazon.com, among others, RPP consists of the firm offering individual products and then enticing single product buyers with a discount on the second product. Our analytical model has a monopolist offering two products to a mix of myopic and strategic consumers. We find that as long as the market consists of a “modest” fraction of myopic consumers, RPP is more profitable than mixed bundling and its special cases. We also present pricing results under RPP. An extension shows that RPP can also be more profitable than a form of price skimming. Limitations and future research directions are discussed.
Thomas Archibald is Professor of Business Modelling and Programme in Business School, University of Edinburgh. He serves as Director for MSc Marketing and Business Analysis. He received his doctorate from University of Edinburgh. His research interests include operations management policies for start-up companies, application of stochastic dynamic programming, management of multi-location inventory systems, models for inventories of perishable goods, maintenance models for roads, bridges and buildings. His work has been published in many top international journals, such as Operations Research, Management Science, Production and Operations Management, Naval Research Logistics, European Journal of Operational Research.He is an associate editor for The Journal of the Operational Research Society (JORS).