Journal
INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION
Volume 26, Issue 2, Pages 502-516Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.ijindorg.2006.01.004
Keywords
nonlinear pricing; quantity discounts; demand estimation; paper towels
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Estimates from a structural model of consumer behavior and firm conduct are used to decompose the extent to which quantity discounts for paper towels are consistent with second degree price discrimination as opposed to cost differences across sizes. Counterfactual exercises assuming that firms offer only one package size or charge uniform prices across sizes indicate that competition in the multi-roll package size segment results in increased consumer surplus and lower prices for all consumers. Published by Elsevier B.V.
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