From fast-food value meals to buy one get one free deals at the grocery store, bundled discounts are in virtually every market. Bundled discounts encompass several different discounts, but the most common understanding of bundled discounts occurs when multiple products are sold together for less than the total price of the products sold individually. Bundled discounts can provide a variety of e...

The standard monopoly pricing problem is re-considered when the buyer’s type (e.g. age, income, experience) can be credibly disclosed at some cost. In the optimal sales mechanism with costly disclosure, the seller posts a “sticker price” available to any buyer, as well as a schedule of discounts available to those who disclose certain types. Unambiguous welfare implications are available in the...

Assuming consumers choose retailers based on their average price perceptions, previous research examined how different retailer pricing strategies (frequent discounting, deep discounting and everyday low pricing) influence these perceptions. In these studies, participants typically viewed competing retailer's product prices over multiple trials that simulated multiple shopping occasions. Then, ...

We report on a natural field experiment on quantity discounts involving more than 14 million consumers. Implementing price reductions ranging from 9-70% for large purchases, we found remarkably little impact on revenue, either positively or negatively. There was virtually no increase in the quantity of customers making a purchase; all the observed changes occurred for customers who already were...

The single-period problem (SPP), also known as the newsboy or newsvendor problem, is to "nd the order quantity which maximizes the expected pro"t in a single-period probabilistic demand framework. Previous extensions to the SPP include, in separate models, the simultaneous determination of the optimal price and quantity when demand is price-dependent, and the determination of the optimal order ...

The marketing literature suggests several phenomena that may contribute to the shape of the relationship between sales and price discounts. These phenomena can produce severe nonlinearities and interactions in the curves, and we argue that those are best captured with a flexible approach. Since a fully nonparametric regression model suffers from the “curse of dimensionality,” we propose a semip...

Providers of cloud computing services commonly offer contract plans (e.g., subscriptions) with different contract lengths as an alternative to single period plans. Contract plans are attractive for consumers who use the service periodically because the consumers benefit from significant price discounts if they commit themselves to the service provider for the time of the contract length. Howeve...

Laboratory methods are used to evaluate factors that affect the success of price-fixing conspiracies. In standard posted-offer markets with no discounts, sellers are able to approach joint-profit-maximizing prices when they are allowed to discuss their decisions in advance. But such discussions are not effective when sellers are allowed to offer secret discounts from their posted prices; transa...