Bundling Strategies When Products Are Vertically Differentiated and Capacities Are Limited

We consider a seller who owns two capacity-constrained resources and markets two products (components) corresponding to these resources as well as a bundle comprising the two components. In an environment where all customers agree that one of the two components is of higher quality than the other and that the bundle is of the highest quality, we derive the seller's optimal bundling strategy. We demonstrate that the optimal solution depends on the absolute and relative availabilities of the two resources as well as upon the extent of subadditivity of the quality of the products. The possible strategies that can arise as equilibrium behavior include a pure components strategy, a partial- or full-spectrum mixed bundling strategy, and a pure bundling strategy, where the latter strategy is optimal when capacities are unconstrained. These conclusions are contrary to findings in the prior literature on bundling that demonstrated the unambiguous dominance of the full-spectrum mixed bundling strategy. Thus, our work expands the frontier of bundling to an environment with vertically differentiated components and limited resources. We also explore how the bundling strategies change as we introduce an element of horizontal differentiation wherein different types of customers value the available components differently.

The Politics of the "New North": Putting History and Geography at Stake in Arctic Futures

References to a “New North” have snowballed across popular media in the past 10 years. By invoking the phrase, scientists, policy analysts, journalists and others draw attention to the collision of global warming and global investment in the Arctic today and project a variety of futures for the region and the planet. While changes are apparent, the trope of a “New North” is not new. Discourses that appraised unfamiliar situations at the top of the world have recurred throughout the twentieth century. They have also accompanied attempts to cajole, conquer, civilize, consume, conserve and capitalize upon the far north. This article examines these politics of the “New North” by critically reading “New North” texts from the North American Arctic between 1910 and 2010. In each case, appeals to novelty drew from evaluations of the historical record and assessments of the Arctic’s shifting position in global affairs. “New North” authors pinpointed the ways science, state power, capital and technology transformed northern landscapes at different moments in time. They also licensed political and corporate influence in the region by delimiting the colonial legacies already apparent there. Given these tendencies, scholars need to approach the most recent iteration of the “New North” carefully without concealing or repeating the most troubling aspects of the Arctic’s past.