Pricing Strategies for Hybrid Bundles: Analytical Model and Insights

- In a hybrid bundle, service quality variability is positively (negatively) associated with optimal bundle price (profit).
- Optimal price of the service (good) in a hybrid bundle is higher (lower) if the good is more scalable than the service.
- Lowering service quality variability can result in higher (lower) profits when the cost increase is low (high).