Dr Ashutosh Prasad of Naveen Jindal School of Management, UT Dallas will present his seminar on "Product Bundling and Reserved Product Pricing"
Tuesday, 20th November from 11:00 – 12:00 at Saïd Business School, Oxford.
Please note: The event will be followed by a reception and it is By invitation only.
Abstract of the seminar: "We will begin with an introduction of product bundling and some recent work in the area. Thereafter, the main paper will be presented, which compares different techniques for selling multiple products. Mixed bundling, in which products are sold separately and as a bundle, is a form of second degree price discrimination. In this paper, we examine how mixed bundling, pure bundling and pure components stack up against reserved product pricing (RPP), an application of inter-temporal pricing to a multi-product setting. Used by Amazon.com, RPP consists of the firm offering individual products and then enticing single product buyers with a discount on the second product. Unlike traditional cross-selling, RPP deals are more narrowly targeted. Our analytical model has a monopolist offering two products to a mix of myopic and strategic consumers. We find that: (a) neither RPP nor mixed bundling is always the best; (b) but so 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 and discuss pricing results under RPP."
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