In the quest to reduce the amount of stuff I own I’ve been going through various cabinets and boxes and trying to list everything on eBay. The most common items are old cables with no corresponding devices (or any ideas what these devices even are) and old DVDs.

Looking at the historic prices for these items doesn’t make me happy - a Lenovo laptop charger is less than $10 while a Raging Bull DVD is a couple of bucks. But this entire process got me thinking about bundling. Bundling makes sense when selling cheap products. It’s not worth the time to list these individually and it’s likely that there are only a few people interested in each item. Bundling them makes it more likely that various items will appeal to a variety of buyers and increase competition. The Lenovo adapter may appeal to one person while a Game Boy charger may appeal to another. By having them in the same lot they are competing against each other and are willing to bid higher to get what they want.

High quality items are competitive on their own. The sum of the individual sales will be greater than the value of the bundle. The intuition is that bundling premium items when buyers only want a single item will decrease buyers’ willingness to pay more for the extra items.

HBO’s the standard example - it has enough consumer demand that it can stay independent and charge a premium. Other channels need to bundle and subsidize each other. I suspect many would be more successful breaking out, such as ESPN, but they’re either stuck in contracts or fear change.

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