Optimal Bundling Strategies Under Heavy-Tailed Valuations

Published Online:https://doi.org/10.1287/mnsc.1100.1234

References

  • Adams W. J., Yellen J. L. Commodity bundling and the burden of monopoly. Quart. J. Econom. (1976) 90(3):475–498CrossrefGoogle Scholar
  • An M. Y. Logconcavity versus logconvexity: A complete characterization. J. Econom. Theory (1998) 80(2):350–369CrossrefGoogle Scholar
  • Anderson C.The Long Tail (2006) (Hyperion, New York) Google Scholar
  • Andrews D. W. K. Cross-section regression with common shocks. Econometrica (2003) 73(5):1551–1585CrossrefGoogle Scholar
  • Bakos Y., Brynjolfsson E. Bundling information goods: Pricing, profits and efficiency. Management Sci. (1999) 45(12):1613–1630LinkGoogle Scholar
  • Bakos Y., Brynjolfsson E., Kahin B., Varian H. R. Aggregation and disaggregation of information goods: Implications for bundling, site licensing and micropayment systems. Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property (2000a) (MIT Press, Cambridge, MA) 114–137Google Scholar
  • Bakos Y., Brynjolfsson E. Bundling and competition on the internet. Marketing Sci. (2000b) 19(1):63–82LinkGoogle Scholar
  • Bentley R. A., Hahn M. W., Shennan S. J. Random drift and culture change. Proc. Roy. Soc. B (2004) 271(1547):1443–1450CrossrefGoogle Scholar
  • Blattberg R. C., Gonedes N. J. Comparison of stable and student distributions as statistical models for stock prices. J. Bus. (1974) 47(2):244–280CrossrefGoogle Scholar
  • Brynjolfsson E., Hu Y., Smith M. D. Consumer surplus in the digital economy: Estimating the value of increased product variety at online booksellers. Management Sci. (2003) 49(11):1580–1596LinkGoogle Scholar
  • Chakraborty I. Bundling decisions for selling multiple objects. Econom. Theory (1999) 13(3):723–733CrossrefGoogle Scholar
  • Chu C. S., Leslie P., Sorensen A. Bundle-size pricing as an approximation to mixed bundling. Amer. Econom. Rev. (2010) . ForthcomingGoogle Scholar
  • Collins A., Hand C., Snell M. C. What makes a blockbuster? Economic analysis of film success in the United Kingdom. Managerial Decision Econom. (2002) 23(6):343–354CrossrefGoogle Scholar
  • Connolly M., Krueger D., Ginsburgh V., Thorsby D. Rockonomics: The economics of popular music. Handbook of the Economics of Art and Culture (2006) (North-Holland, Amsterdam) 667–719CrossrefGoogle Scholar
  • Dansby R. E., Conrad C. Commodity bundling. Amer. Econom. Rev. (1984) 74(2):377–381Google Scholar
  • De Vany A.Hollywood Economics: How Extreme Uncertainty Shapes the Film Industry (2004) (Routledge, London) CrossrefGoogle Scholar
  • De Vany A., Walls D. Does Hollywood make too many R-rated movies? Risk, stochastic dominance, and the illusion of expectation. J. Bus. (2002) 75(3):425–51CrossrefGoogle Scholar
  • De Vany A., Walls D. Motion picture profit, the stable Paretian hypothesis, and the curse of the superstar. J. Econom. Dynam. Control (2004) 28(6):1035–1057CrossrefGoogle Scholar
  • Eliashberg J., Elberse A., Leenders M. A. A. M. The motion picture industry: Critical issues in practice, current research, and new research directions. Marketing Sci. (2006) 25(6):638–661LinkGoogle Scholar
  • Embrechts P., Klüppelberg C., Mikosch T.Modelling Extremal Events for Insurance and Finance (1997) (Springer, New York) CrossrefGoogle Scholar
  • Fama E. The behavior of stock market prices. J. Bus. (1965) 38(1):34–105CrossrefGoogle Scholar
  • Fang H., Norman P. To bundle or not to bundle. RAND J. Econom. (2006) 37(4):946–963CrossrefGoogle Scholar
  • Fang K.-T., Kotz S., Ng K. W.Symmetric Multivariate and Related Distributions (1990) (Chapman and Hall, New York) CrossrefGoogle Scholar
  • Frank R. H., Cook P. J.The Winner-Take-All Society (1995) (Free Press, New York) Google Scholar
  • Gabaix X. Power laws in economics and finance. Annual Rev. Econom. (2009) 1:255–293CrossrefGoogle Scholar
  • Gabaix X., Gopikrishnan P., Plerou V., Stanley H. E. Institutional investors and stock market volatility. Quart. J. Econom. (2006) 121(2):461–504CrossrefGoogle Scholar
  • Gaffeo E., Scorcu A. E., Vici L. Demand distribution dynamics in creative industries: The market for books in Italy. Inform. Econom. Policy (2008) 20:257–268CrossrefGoogle Scholar
  • Geng X., Stinchcombe M. B., Whinston A. B. Bundling information goods of decreasing value. Management Sci. (2005) 51(4):662–667LinkGoogle Scholar
  • Ghose A., Sundararajan A. Evaluating pricing strategy using e-commence data: Evidence and estimation challenges. Statist. Sci. (2006) 21(2):131–142CrossrefGoogle Scholar
  • Glasserman P., Heidelberger P., Shahabuddin P. Portfolio value-at-risk with heavy-tailed risk factors. Math. Finance (2002) 12(3):239–269CrossrefGoogle Scholar
  • Hitt L. M., Chen P.-y. Bundling with customer self-selection: A simple approach to bundling low-marginal-cost goods. Management Sci. (2005) 51(10):1481–1493LinkGoogle Scholar
  • Ibragimov R. New majorization theory in economics and martingale convergence results in econometrics. (2005) . Ph.D. dissertation, Yale University, New Haven, CTGoogle Scholar
  • Ibragimov R. Efficiency of linear estimators under heavy-tailedness: Convolutions of α-symmetric distributions. Econometric Theory (2007) 23(3):501–517CrossrefGoogle Scholar
  • Ibragimov R., Durlauf S. N., Blume L. E. Heavy tailed densities. The New Palgrave Dictionary of Economics Online (2009) (Palgrave Macmillan, New York) . http://www.dictionaryofeconomics.com/article?id=pde2009_H000191CrossrefGoogle Scholar
  • Ibragimov R., Walden J. The limits of diversification when losses may be large. J. Banking Finance (2007) 31(8):2551–2569CrossrefGoogle Scholar
  • Ibragimov R., Jaffee D., Walden J. Nondiversification traps in catastrophe insurance markets. Rev. Financial Stud. (2009) 22(3):959–993CrossrefGoogle Scholar
  • Kalyanaram G., Robinson W. T., Urban G. L. Order of market entry: Established empirical generalizations, emerging empirical generalizations, and future research. Marketing Sci. (1995) 14(3):G212–G221LinkGoogle Scholar
  • Kohli R., Sah R. Some empirical regularities in market shares. Management Sci. (2006) 52(11):1792–1792LinkGoogle Scholar
  • Krishna V.Auction Theory (2002) (Academic Press, San Diego) Google Scholar
  • Lewbel A. Bundling of substitutes or complements. Internat. J. Indust. Organ. (1985) 3(1):101–107CrossrefGoogle Scholar
  • Mandelbrot B. The variation of certain speculative prices. J. Bus. (1963) 36(4):394–419CrossrefGoogle Scholar
  • Mandelbrot B.Fractals and Scaling in Finance: Discontinuity, Concentration, Risk (1997) (Springer-Verlag, New York) CrossrefGoogle Scholar
  • Marshall A. W., Olkin I.Inequalities: Theory of Majorization and Its Applications (1979) (Academic Press, New York) Google Scholar
  • McAfee R., McMillan J., Whinston M. Multiproduct monopoly, commodity bundling and correlation of values. Quart. J. Econom. (1989) 114(2):371–384CrossrefGoogle Scholar
  • Milgrom P., Weber R. A theory of auctions and competitive bidding. Econometrica (1982) 50(5):1089–1122CrossrefGoogle Scholar
  • Palfrey T. R. Bundling decisions by a multiproduct monopolist with incomplete information. Econometrica (1983) 51(2):463–483CrossrefGoogle Scholar
  • Perline R. Strong, weak and false inverse power laws. Statist. Sci. (2005) 20(1):68–88CrossrefGoogle Scholar
  • Praetz P. The distribution of share price changes. J. Bus. (1972) 45(1):49–55CrossrefGoogle Scholar
  • Proschan F. Peakedness of distributions of convex combinations. Ann. Math. Statist. (1965) 36(6):1703–1706CrossrefGoogle Scholar
  • Rachev S. T., Menn C., Fabozzi F. J.Fat-Tailed and Skewed Asset Return Distributions: Implications for Risk Management, Portfolio Selection, and Option Pricing (2005) (Wiley, Hoboken, NJ) Google Scholar
  • Salinger M. A. A graphical analysis of bundling. J. Bus. (1995) 68(1):85–98CrossrefGoogle Scholar
  • Schmalensee R. L. Gaussian demand and commodity bundling. J. Bus. (1984) 57(1):S211–S230CrossrefGoogle Scholar
  • Shapiro C., Varian H. R.Information Rules: A Strategic Guide to the Network Economy (1999) (Harvard Business School Press, Boston) Google Scholar
  • Silverberg G., Verspagen B. The size distribution of innovations revisited: An application of extreme value statistics to citation and value measures of patent significance. J. Econometrics (2007) 139(2):318–339CrossrefGoogle Scholar
  • Stremersch S., Tellis G. J. Strategic bundling of products and prices: A new synthesis for marketing. J. Marketing (2002) 66(1):55–72CrossrefGoogle Scholar
  • Taleb N. N.The Black Swan: The Impact of Highly Improbable (2007) (Random House, New York) Google Scholar
  • Uchaikin V. V., Zolotarev V. M.Chance and Stability: Stable Distributions and Their Applications (1999) (VSP, Utrecht, The Netherlands) CrossrefGoogle Scholar
  • Venkatesh R., Kamakura W. Optimal bundling and pricing under a monopoly: Contrasting complements and substitutes from independently valued products. J. Bus. (2003) 76(2):211–231CrossrefGoogle Scholar
  • Wu S.-y., Hitt L. M., Chen P.-y., Anandalingam G. Customized bundle pricing for information goods: A nonlinear mixed-integer programming approach. Management Sci. (2008) 54(3):608–622LinkGoogle Scholar
  • Zolotarev V. M.One-Dimensional Stable Distributions (1986) (American Mathematical Society, Providence, RI) CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.