All-units discounts as a partial foreclosure device

• 成果类型: Article
• 署名作者: Chao, Yong; Tan, Guofu; Wong, Adam Chi Leung
• 署名单位: University of Louisville; University of Southern California; Lingnan University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12220
• 发表日期: 2018
• 页码: 155-180
• 关键词: market-share discounts; naked exclusion; loyalty discounts; CONTRACTS; barrier; entry

摘要

We investigate the strategic effects of all-units discounts (AUDs) used by a dominant firm in the presence of a capacity-constrained rival. Due to the limited capacity of the rival, the dominant firm has a captive portion of the buyer's demand for the single product. As compared to linear pricing, the dominant firm can use AUDs to go beyond its captive portion by tying its captive demand with part of the competitive demand and partially foreclose its small rival. When the rival's capacity level is well below relevant demand, AUDs reduce the buyer's surplus.