Parameter

Meaning

$p_1$

The price of selling product 1 when selling separately

$p_2$

The price of selling product 2 when selling separately

$p_1^b$

The price of selling product 1 when bundled sales

$p_2^b$

The price of selling product 1 when bundled sales

$p_{12}$

The price of the product bundled online

$\omega$

The consumer's sensitivity to the degree of substitution of the bundled product

$\theta$

A degree of substitution

$\rho$

Consumers’ preference for physical channels

a

Consumer’s preference for product 1 when making a purchase

v

The value of product 1

$\alpha v$

The value of product 2

$c_t$

Marginal cost of sales in physical channels

$c_e$

Marginal cost of sales in online channels