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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

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1935-1704
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Undivide and Conquer: On Selling a Divisible and Homogeneous Good

Omer Levy / Rann Smorodinsky / Moshe Tennenholtz
  • Department of Industrial Engineering and Management, Technion – Israel Institute of Technology, Haifa, Israel
  • Microsoft Research, Herzliya, Israel
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Published Online: 2014-07-18 | DOI: https://doi.org/10.1515/bejte-2014-0002

Abstract

With the prevalence of cloud computing emerges the challenges of pricing cloud computing services. There are various characteristics of cloud computing which make the problem unique. We study an abstract model which focuses on one such aspect – the sale of a homogeneous and fully divisible good. We cast onto our model the idea of bundling, studied within the context of monopolist pricing of indivisible goods. We demonstrate how selling a divisible good as an indivisible one may increase seller revenues and characterize when this phenomenon occurs, and the corresponding gain factors.

Keywords: bundling; VCG; auctions

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About the article

Published Online: 2014-07-18

Published in Print: 2015-01-01


Citation Information: The B.E. Journal of Theoretical Economics, ISSN (Online) 1935-1704, ISSN (Print) 2194-6124, DOI: https://doi.org/10.1515/bejte-2014-0002.

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