Teaching Bundling Theory with Simple Geometry
Year: 2003
Type: preprint
Abstract: This paper shows how we might successfully introduce students in principles and intermediate microeconomic theory classes to the topic of bundling, i.e., the selling of two or more goods as a package, rather than separately. It is surprising how much students can learn using only the tools of highschool geometry. Specifically, one can prove that with independently distributed reservation prices, pure bundling raises both profits and consumers' surplus. We also explore the topic of mixed bundling, where both bundles and separate sales are conducted.
Source: SSRN Electronic Journal
Author: John C. Eckalbar
Institution: California State University, Chico
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: Quality education
Open Access status: green
OpenAlex ID: W1482869403