A Cooperative Game Theory Model of Quantity Discounts
- 1 June 1989
- journal article
- Published by Institute for Operations Research and the Management Sciences (INFORMS) in Management Science
- Vol. 35 (6) , 693-707
- https://doi.org/10.1287/mnsc.35.6.693
Abstract
Quantity discounts offered by a monopolist are considered in the context of a bargaining problem in which the buyer and the seller negotiate over the order quantity and the average unit price. All-units and incremental quantity discounts that permit transaction at a negotiated outcome are described. The effects of risk sensitivity and bargaining power on quantity discounts are discussed for alternative bargaining models.Keywords
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