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Exploring Bundling Theory with Geometry

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  • John C. Eckalbar

Abstract

Abstract : The author shows how instructors 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 high school geometry. To be specific, one can prove that with independently distributed reservation prices, pure bundling raises both profits and consumers' surplus. The author also explores the topic of mixed bundling (i.e., when both bundles and separate sales are conducted).

Suggested Citation

  • John C. Eckalbar, 2006. "Exploring Bundling Theory with Geometry," The Journal of Economic Education, Taylor & Francis Journals, vol. 37(1), pages 68-82, January.
    • Handle: RePEc:taf:jeduce:v:37:y:2006:i:1:p:68-82
    DOI: 10.3200/JECE.37.1.68-82
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    Cited by:

    1. Chakravarty, A. & Mild, A. & Taudes, A., 2013. "Bundling decisions in supply chains," European Journal of Operational Research, Elsevier, vol. 231(3), pages 617-630.
    2. William G. Morrison, 2016. "Product bundling and shared information goods: A pricing exercise," The Journal of Economic Education, Taylor & Francis Journals, vol. 47(1), pages 49-63, January.

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