The Effect of Optimal Discounting on Bundle Preference In Gift-giving Context

Bundling is the joint sale of two or more separate products at a single price, often discounted. When decision makers are faced with a bundle choice, they can opt to either purchase the bundle or any of its separate products. Gift-giving is a social activity that establishes relationships. Gift-giving situations can be voluntary or obligatory. In the former, the giver’s motivations for giving the gift are internal, while in the latter, their motivations are external.
Decision makers derive pleasure from the value a product provides (its acquisition utility) as well as the quality of the deal - its transaction utility. The latter can often lure them into making irrational expenditures- which bundles can sometimes be.
This study therefore aims to demonstrate that a larger discount size rather than a smaller one will influence a decision maker to choose a bundle over its components particularly when choosing an obligatory gift rather than a voluntary one.