Week 2: Price Discrimination - Bundling

Question 1

Bundling

Answer 1

when you sell a package deal

Question 2

Bundling example

Answer 2

you bundle AMC and ESPN under basic cable

Question 3

Carriage fees

Answer 3

when a cut of the revenue from cable goes to the channel

Question 4

When does bundling work well?

Answer 4

with negatively correlated preferences
(e.g. someone buying cable like sports do they want ESPN but they don’t pay attention to Food Network)
*this allows channels to make more as a bundle than they would a la carte