Bundling or unbundling? Integrated simulation model of optimal pricing strategies

Bundling is the practice of selling goods together in a package. The extant research has recognised the role of three elements affecting the profitability of bundling strategies: (i) heterogeneity of consumer's reservation prices and their dependence structure; (ii) complementarity of the demand and (iii) economies of scale and scope in production. These major elements are well defined but have never been integrated into one model. We present an...