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A cooperative game theory model of quantity discounts. (English) Zbl 0721.90030
Summary: 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.

MSC:
91B26 Auctions, bargaining, bidding and selling, and other market models
91A12 Cooperative games
90B60 Marketing, advertising
91A40 Other game-theoretic models
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