The PriceProdSimp3.lng Model

Product bundle pricing (PriceProdSimp)

View the model
Download the model

Product bundle pricing (PriceProdSimp); Producer wants to choose a price for each of a number of products, based on knowledge of the "willingness to pay" (Reservation price) of various market segments for each of the products. The producer wants to choose prices so as to maximize revenue minus costs. You can think of a product as a bundle of features. If the price of a product/bundle is > than a customer's reservation price, then the customer will not buy that product.
Each customer, i, will buy the one product/bundle, j, that maximizes his consumer surplus
( = reservation_price(i,j) minus price i must pay for j.)
Each customer/market segment is described by: Its size,
Reservation price for each product;


Marketing | Equilibrium | Uncertainty | Product Management | Bundling | Consumer Choice | Pricing |