| Article ID: | iaor1989141 |
| Country: | United States |
| Volume: | 35 |
| Issue: | 6 |
| Start Page Number: | 693 |
| End Page Number: | 707 |
| Publication Date: | Jun 1989 |
| Journal: | Management Science |
| Authors: | Kohli Rajeev, Park Heungsoo |
| Keywords: | inventory, production, game theory |
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.