Related papers: Arbitraging Narrow Bracketers
Experiments suggest that people fail to take into account interdependencies between their choices -- they do not broadly bracket. Researchers often instead assume that people narrowly bracket, but existing designs do not test it. We design…
We study optimal bundling when consumers differ in one dimension. We introduce a partial order on the set of bundles defined by (i) set inclusion and (ii) sales volumes (if sold alone and priced optimally). We show that if the undominated…
Combining two or more items and selling them as one good, a practice called bundling, can be a very effective strategy for reducing the costs of producing, marketing, and selling goods. In this paper, we consider a form of multi-issue…
To choose between two discrete goods, a consumer pays attention to only those with prices below a threshold. From these, she chooses her most preferred good. We assume consumers in a population have the same preference but may have…
We study a class of manipulations in combinatorial auctions where bidders fundamentally misrepresent what goods they are interested in. Prior work has largely assumed that bidders only submit bids on their bundles of interest, which we call…
Multi-item mechanisms can be very complex offering many different bundles to the buyer that could even be randomized. Such complexity is thought to be necessary as the revenue gaps between randomized and deterministic mechanisms, or…
Extensive research shows that consumers are generally averse to price discrimination. However, instruments of differential pricing can benefit consumer surplus and alleviate inequity through targeted price discounts. This paper examines how…
Aggregating risks from multiple sources can be complex and demanding, and decision makers usually adopt heuristics to simplify the evaluation process. This paper axiomatizes two closed related and yet different heuristics, narrow bracketing…
We study a class of iterative combinatorial auctions which can be viewed as subgradient descent methods for the problem of pricing bundles to balance supply and demand. We provide concrete convergence rates for auctions in this class,…
After years of speculation, price discrimination in e-commerce driven by the personal information that users leave (involuntarily) online, has started attracting the attention of privacy researchers, regulators, and the press. In our…
In economics, there are many ways to describe the interaction between a "seller" and a "buyer". The most common one, with which we interact almost every day, is selling for a fixed price. This option is perfect for selling a mass product,…
We initiate the study of an interesting aspect of sponsored search advertising, namely the consequences of broad match-a feature where an ad of an advertiser can be mapped to a broader range of relevant queries, and not necessarily to the…
Buyers (e.g., advertisers) often have limited financial and processing resources, and so their participation in auctions is throttled. Changes to auctions may affect bids or throttling and any change may affect what winners pay. This paper…
We seek to understand when heterogeneity in user preferences yields improved outcomes in terms of overall cost. That this might be hoped for is based on the common belief that diversity is advantageous in many settings. We investigate this…
When confronted with a host of issues, groups often save time and energy by compiling many issues into a single bundle when making decisions. This reduces the time and cost of group decision-making, but it also leads to suboptimal outcomes…
In the context of nonlinear prices, the empirical evidence suggests that the consumers have cognitive biases represented in a limited understanding of nonlinear price structures, and they respond to some alternative perceptions of the…
We compare static arbitrage price bounds on basket calls, i.e. bounds that only involve buy-and-hold trading strategies, with the price range obtained within a multi-variate generalization of the Black-Scholes model. While there is no gap…
We consider a single buyer with a combinatorial preference that would like to purchase related products and services from different vendors, where each vendor supplies exactly one product. We study the general case where subsets of products…
This paper studies optimal bundling of products with non-additive values. Under monotonic preferences and single-peaked profits, I show a monopolist finds pure bundling optimal if and only if the optimal sales volume for the grand bundle is…
In this paper, we consider a form of multi-issue negotiation where a shop negotiates both the contents and the price of bundles of goods with his customers. We present some key insights about, as well as a procedure for, locating mutually…