Mark Armstrong
Economist whose review of nonlinear pricing supplies the unglamorous half of the bulk-buying story.
Who they are
Armstrong is at Oxford and works on industrial organisation. The 2016 review covers when quantity discounts and bundle discounts are profitable, under monopoly and oligopoly, and where bounded rationality enters the picture.
Key papers
Armstrong, M. (2016). Nonlinear pricing. Annual Review of Economics, 8, 583-614.
Key ideas
Quantity discounts are frequently profitable, which is why the intuition that bigger is cheaper exists and mostly holds.
The review covers the impact of consumers with bounded rationality on these pricing structures.
It also covers add-on products and quality upgrades, which is the same machinery seen elsewhere on this site under shrouding.
Concepts on this site
Sources
- doi:10.1146/annurev-economics-080614-115650