On the anti-competitive effects of quantity discounts
AbstractWe analyze the competitive effects of quantity discounts in an asymmetric duopoly. We find that for a sizeable set of parameter values, quantity discounts harm the smaller firm and reduce consumers' surplus. They can even decrease social welfare, i.e. the sum of producers' and consumers' surpluses. However, the circumstances in which quantity discounts may decrease social welfare are limited and difficult to identify in practice.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 29 (2011)
Issue (Month): 3 (May)
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Web page: http://www.elsevier.com/locate/inca/505551
Quantity discounts Non-linear pricing Exclusion Dominant firm;
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