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.


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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