algo-price-bundle
Bundle Pricing Strategy
Overview
Bundle pricing sells multiple products together at a combined price, extracting consumer surplus by averaging valuations across products. Works when customers have heterogeneous, negatively correlated valuations. Three types: pure bundling (bundle only), mixed bundling (bundle + individual), unbundling.
When to Use
Trigger conditions:
- Deciding whether to bundle products/services together
- Setting bundle price relative to individual prices
- Analyzing whether a current bundle should be unbundled
When NOT to use:
- When products have independent demand with no valuation correlation (bundling adds no value)
- When regulations prohibit tying arrangements
Algorithm
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