Does buyer heterogeneity steepen or flatten quantity discounts?

• 成果类型: Article
• 署名作者: Conlon, John R.
• 署名单位: University of Mississippi
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12210
• 发表日期: 2017
• 页码: 1027-1043
• 关键词: Moral hazard; TARIFFS; monopoly; welfare; prices

摘要

This article argues that as the distribution of a firm's buyers becomes more heterogeneous, the firm's profit-maximizing quantity-discount schedule becomes less steep. First, we note that one measure of heterogeneity is the slope of the hazard function, expressed in terms of a simple crossing condition. We then show that marginal price schedules, for distributions of buyers which are more heterogeneous by this measure, are less negatively sloped in that they cross schedules for more homogeneous distributions from below. Intuitively, quantity discounts are a response to an individual buyer's declining marginal utilities, and buyer heterogeneity interferes with this response.