2
$\begingroup$

How is a block price decided when there are many products to be sold? For example the buffet in various restaurants or combos in McDonalds or KFC (like the bucket buddy). Can somebody point me to research papers or any link or book I can read to get into the logistics and mathematics behind pricing such combos?

$\endgroup$
2
$\begingroup$

I am not exactly sure what you mean by "block price" and I don't know the bucket buddy. However, I feel like you are talking about what microeconomists term bundling, the practice of selling two (or more) different goods together in one package.

Interestingly, bundling can be profitable even without any production-cost related efficiency arguments. It can serve as a tool to sort consumer types and thus can be used to price-discriminate.

The classical paper on bundling by a monopolist is McAfee, McMillan and Whinston (1989). For an introductory treatment of the topic read, e.g., Belleflamme and Peitz, Chapter 11 - or the corresponding chapter of basically any other textbook on industrial organization or microeconomics.

$\endgroup$
  • $\begingroup$ Yes, I wanted to ask about bundling, but what I really wanted to know is what kinds of data do they use to bundle goods and how do they combine/utilize the data. I mean if we have n number of goods how to decide using mathematical model which of the goods would be best. Can you point me to some research in these directions. $\endgroup$ – Joy Chopra Feb 21 '17 at 11:33

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.