What if you weight each characteristics? That is to say safety accounts for
30%, reliability for 20%, etc. You ended up with weights for each
characteristic with a total of 100%. I don't know how you would assign or
come up with the percentages. You maybe able to get the weights from past
statistics like owner survey, future customer feedback, and focus groups.

-----Original Message-----
Sent: Wednesday, September 05, 2001 7:56 AM
Subject: Re: help, please


This is probably a stupid question, but I'd like to know if anyone 
knows of a generally accepted way to model consumer demand for a 
bundled good.  

I have in mind a good with multiple characteristics, each valued by 
the consumer.  For instance, a motor vehicle might offer 
characteristics such as comfort, safety, reliability, and so on.  

Some people have suggested treating the individual characteristics as 
separate goods, but that does not seem to help.  For the problem I 
have in mind, the characteristics cannot be purchased separately, 
that is, the good cannot be unbundled.  

Moreover, I would ultimately like to perfom comparative statics on 
the individual bundled characteristics.  (For instance, 
increasing the vehicle's safety while holding fixed the other 
characteristics).  Hence the characteristics are exogenous, and 
therefore cannot be treated as endogenously purchased goods.  It is 
the demand for the overall bundle that is endogenous.  

The problem seems straightforward enough that there might even exist 
a textbook presentation.  But I have not been able to find anything.  
Any help would be greatly appreciated.  

Marc Poitras  

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