[Step-by-Step] Bundling Time Warner could offer the History Channel (H) and Showtime (S) individually or as a bundle of both. Suppose the reservation prices of
Question: Bundling
Time Warner could offer the History Channel (H) and Showtime (S) individually or as a bundle of both.
Suppose the reservation prices of customers 1 and 2 (the highest prices they are willing to pay) are presented in the boxes below.
The cost to Time Warner is $1 per customer for licensing fees.
| Preferences | ||
| Showtime | History Channel | |
| Customer 1 | 9 | 2 |
| Customer 2 | 3 | 8 |
- Should Time Warner bundle or sell separately? (Essay)
- Should Time Warner bundle if everyone likes Showtime more than the History Channel, i.e., preferences are positively correlated. (Essay)
- Suppose Time Warner could sell Showtime for $9, and History channel for $8, while making Showtime-History bundle available for $13. Should it use mixed bundling. i.e., sells products both separately and as a bundle? (Essay)
Price: $2.99
Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document 