Intertemporal mixed bundling and buying frenzies

Citation
P. Degraba et R. Mohammed, Intertemporal mixed bundling and buying frenzies, RAND J ECON, 30(4), 1999, pp. 694-718
Citations number
21
Categorie Soggetti
Economics
Journal title
RAND JOURNAL OF ECONOMICS
ISSN journal
07416261 → ACNP
Volume
30
Issue
4
Year of publication
1999
Pages
694 - 718
Database
ISI
SICI code
0741-6261(199924)30:4<694:IMBABF>2.0.ZU;2-M
Abstract
By initially selling goods only in bundles and subsequently selling unsold units individually, a multiproduct seller can create a buying frenzy in whi ch his profit is higher than it would be if he sold all units individually at their marked clearing prices. In this frenzy, high-valuation customers b uy a bundle because they expect quantity rationing when units are sold indi vidually Their purchases reduce the quantity to be sold individually, causi ng the shortages that result in rationing. The bundle's price exceeds the s um of the individual prices, a fact observed in markets for rock concert ti ckets.