The Unpriced Bundle: Decision Suppression in Software Procurement¶

Stefane Fermigier (Abilian) · sf@abilian.com

Draft working paper v0.1, 2026-08-04. A short formal treatment: every proposition carries a proof, a numeric cross-check, and a Monte-Carlo report. No identification is claimed.

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Abstract¶

An organisation does not replace a free component with a paid one, however much better the paid one is. The sentence is folklore among practitioners and absent from the standard models of switching costs and network effects, which act on the terms of a decision rather than on its occurrence.

This paper models the occurrence. A component that arrives inside a bundled licence at zero incremental price generates no budget line, hence no renewal event, hence no comparison: the decision that the entrant's price would enter is never convened. In the model, procurement compares options only when a decision event fires; events are free at contract renewal for separately priced goods and require costly internal initiation for bundled ones.

Three results follow. An entrant strictly better and strictly cheaper than the component's stand-alone value is adopted under separate pricing and suppressed under bundling whenever the champion's stake falls short of the initiation cost (Proposition 1). Conditional on non-initiation, adoption is invariant to the entrant's price: a subsidy buys nothing at a given buyer until it covers that buyer's full wedge gap, and part of what it then buys is the friction itself. In the switching-cost benchmark every step of subsidy moves the adoption margin (Proposition 2). Instruments that re-create the decision event (line-itemised pricing, a periodic evaluation duty, disclosure of the imputed component price) restore the price margin for all buyers at once, at near-zero resource cost (Proposition 3). The 2025 Microsoft Teams commitments, which require suites without the component at an appreciably lower price, with the corresponding offer displayed wherever the bundled one is advertised, are Proposition 3's instruments entering the record.

Keywords: bundling, tying, procurement, status quo bias, switching costs, digital sovereignty, coordination.

JEL: L13, L40, D23, H57, L86.

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Fermigier, S. (2026). The Unpriced Bundle: Decision Suppression in Software Procurement.
Draft working paper v0.1, Abilian Econ Lab.
https://econ.lab.abilian.com/papers/unpriced-bundle/