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Product Bundling: Impacts Of Product Heterogeneity And Risk Considerations, Mehdi Sheikhzadeh, Ehsan Elahi

Ehsan Elahi

Bundling has been extensively studied in the literature and its benefits have been manifested through three perspectives of achieving better price discrimination, helping to save costs, and preserving the power for deterring a potential entrant. In this study, we examine two aspects of bundling which have not been studied before. We examine the impact of product heterogeneity on bundling decisions. We also address risk considerations in a bundling problem. Specifically, we consider a retailer who has the option of selling a bundle of two products (pure bundling policy), or selling the products separately (no-bundling policy). The retailer could also face …