Bundling decisions for selling multiple objects
Auctioneers often face the decision of whether to bundle two or more different objects before selling them. Under a Vickrey auction (or any other revenue equivalent auction form) there is a unique critical number for each pair of objects such that when the number of bidders is fewer than that critical number the seller strictly prefers a bundled sale and when there are more bidders the seller prefers unbundled sales. This property holds even when the valuations for the objects are correlated for a given bidder. The results have been proved using a mathematical technique of quantiles that can be extremely useful for similar analysis.
Year of publication: |
1999-04-15
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Authors: | Chakraborty, Indranil |
Published in: |
Economic Theory. - Springer. - Vol. 13.1999, 3, p. 723-733
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Publisher: |
Springer |
Subject: | Auctions Bundling. |
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