Hi,
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
