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Erscheinungsjahr: 
2024
Schriftenreihe/Nr.: 
Tinbergen Institute Discussion Paper No. TI 2024-048/VII
Verlag: 
Tinbergen Institute, Amsterdam and Rotterdam
Zusammenfassung: 
This paper develops a novel theory linking quantity discounts to bargaining power in scenarios where retailers, organized as a trade association, negotiate uniform wholesale prices with suppliers. Our theory predicts that suppliers offer greater quantity discounts in regional markets where they possess relatively less bargaining power, as a counterbalance to the higher national wholesale prices negotiated by the retailer trade association. We test these predictions using detailed product-level data from the Indian pharmaceutical industry, where significant geographic variations in quantity discounts are observed. Our findings provide empirical support for the proposed theory.
Schlagwörter: 
quantity discounts
bargaining power
pharmaceuticals
India
JEL: 
L11
L42
D22
Dokumentart: 
Working Paper
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