News Finding: The researchers say their findings challenge traditional theoretical thinking on quantity discounts, particularly that such practices increase company profitability.
Paper Finding: This practice stands in stark contrast to many of King's direct competitors and to many other producers of consumer goods.
News Context: Data suggest some consumers who would have made small purchases were discouraged from doing so when faced with large quantity discounts. The researchers say their findings challenge traditional theoretical thinking on quantity discounts, particularly that such practices increase company profitability. The experiment came at essentially no cost to King, requiring a minimal number of employee hours to execute.
Paper Context: The price per bar is reduced by less than 10% for a purchase of 1,000 gold bars, the largest quantity offered. This practice stands in stark contrast to many of King's direct competitors and to many other producers of consumer goods. Note that although, in general, price discrimination is carried out by firms to maximize profit, it also may benefit consumers.