William Sjostrom >Not at all obvious. Two goods, A and B, with marginal cost CA and CB,
Within what may be a narrow range, the approximate marginal cost of two goods may actually be knowable by an experienced person of good judgment. >and independent marginal value VA and VB Neither we nor the seller can know the "marginal value." Indeed, neither we nor he can know the price at which each could "best" (i.e., most [apparently] profitable over a fairly brief span of time in fairly-well constrained circumstances, including a vigorous belief that buyers', and their tastes and preferences, will not change appreciably in response to either what the seller or anyone else [i.e., more or less remote competitors] does) price at which to sell either product. And, as I mentioned in another thread, neither we nor the seller can _know_, either ex ante or ex post whether the seller's decision was "correct," among other reasons because the experiment is hardly controlled. >with VA>CA and VB>CB. A buyer will pay VA+VB for the bundle This is true _only_ of a person who would, in _any_ event, have bought one and only one of each, in a single transaction. Most of us, in fact, will buy an add-on as part of a bundle -- but _only_ if the bundle is less than the sum of the separate items. Michael Michael E. Etchison Texas Wholesale Power Report MLE Consulting www.mleconsulting.com 1423 Jackson Road Kerrville, TX 78028 (830) 895-4005
