🎁 Bundle Pricing Strategy Simulator
Explore how bundling products can maximize profit by capturing consumer surplus
Assumptions: Marginal costs are zero (profit = revenue). Table values are reservation prices — each customer's maximum willingness to pay.
📊 Select Business Scenario
👥 Customer Reservation Prices
| Customer | Burger | Fries |
|---|
Values are reservation prices (maximum willingness to pay, in dollars)
💰 Choose Pricing Strategy
📋 Graph Description
Select a scenario to see demand curves for each product and their bundle.
🎓 Why Does Bundling Work?
Bundling is most profitable when customers have negatively correlated preferences — one customer values Product A highly but Product B less, while another has opposite preferences.
- Separate pricing — best when customers have similar, homogeneous preferences.
- Pure bundling — smooths out diverse preferences; customers pay similar totals even when individual valuations differ. Captures more surplus.
- Mixed bundling — charges premium prices to high-value customers for individual items, while using the bundle to capture customers with moderate valuations for both.
The key insight: bundling aggregates willingness to pay, reducing the variance across customers and letting the firm set a higher price without excluding buyers.
📊 Demand Data Table
| Rank | Burger WTP | Fries WTP | Bundle WTP (Sum) |
|---|
Customers are ranked from highest to lowest willingness to pay for each product independently. The bundle WTP is the sum of both individual values.