Bundling of substitutes or complements

The Adams-Yellen two good bundling framework is generalized to allow the goods to be substitutes or complements. General theorems on price change effects are given. A monopolist may find it most profitable to offer the goods only as a bundle, even if they are (imperfect) substitutes, or to not bundle the goods, even if they are complements. If one good is competitively sold, a monopoly producer of the other good can never increase profits by offering his good only as part of a bundle. However, such a monopolist might profitably offer his good in both bundled and unbundled form to price discriminate, even if the two goods are substitutes.