a r t i c l e i n f o We 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 ...

In recent years, per capita pork consumption in Canada has trended downward, while consumption of chicken and beef has remained relatively stable. One way the industry can respond to declining consumption is by investing in a promotional activity such as discounting. FARE researchers examined the effects of different types of discounts on the demand for pork products in Canada. The study used d...

All-units discounts in retail contracts refer to discounts that lower a retailer’s wholesale price on every unit purchased when the retailer’s purchases equal or exceed some quantity threshold. These discounts pose a challenge to economic theory because it is difficult to understand why a manufacturer ever would charge less for a larger order if its intentions were benign. In this paper, we sho...

2. Offer Patient Discounts Only to Self-Pay Patients Discounts, such as prompt-pay and cash-up-front discounts, should not be given to insured patients in Wisconsin. Interestingly, the federal AKS allows legitimate discounts reflecting actual savings to the provider.5 However, such discounts would be considered a reduction or elimination of cost-sharing amounts, which are prohibited by Wis. Sta...

This paper studied the different impacts of two compensation frames, “giving refunds” and “offering discounts”, on consumer’s perceived fairness in the recovery of online pricing error. We found that people perceived more fairness from a negative frame “offering discounts” than from a positive frame “giving refunds” in general. Then we introduced the regulatory fit theory to elucidate the compe...

We examine how short sale constraints on portfolio holdings affect closed-end fund (CEF) discounts and thereby provide evidence on the causal effect of limits to arbitrage on asset mispricing. Using Regulation SHO as a natural experiment that relaxes shortsale constraints on pilot stocks, we find that discounts of CEFs holding more pilot stocks decrease relative to CEFs holding fewer pilot stoc...

This paper uses laboratory methods to evaluate whether price-fixing conspiracies break down in the presence of opportunities to offer secret discounts. The primary treatment difference is whether or not buyer-specific discounts from the posted list price are permitted. In standard posted-offer markets, conspiring sellers are able to find and maintain near-monopoly prices. But when the possibili...

In this paper, a dynamic terms of sale model is developed which suggests deep cash discounts can be partially explained by the positive relationship between the shadow value of sales and the optimal cash discount. The effect of sales volume uncertainty on the magnitude of cash discounts is also explored. Numerical results suggest the relationship between uncertainty and cash discounts is nonlin...