Essays on empirical analysis of quantity discounts in retailing

This dissertation consists of two empirical essays on a very commonly practiced retailer pricing strategy of offering quantity discounts on large size packages.;The first essay of the dissertation conducts an empirical examination of the determinants of quantity discounts offered by retailers. Extant literature in marketing has shown interest in various aspects of retailer pricing such as retailer category pricing behavior, determinants of retail margins, determinants of retailer pricing strategy and drivers of retailer pricing tactics over time. Despite the widespread interest in retailer pricing behavior, little is known about the factors that influence a widely-practiced pricing strategy by retailers, namely quantity discounts. Thus, drawing upon industrial organization theory and retailer pricing literature, we seek to empirically examine the role of market structure and market power variables on the size of quantity discounts.;The objective of the second essay of the dissertation is to develop a structural model of demand and supply to investigate the impact of store brand introduction by a retailer on the quantity discounts and profits thereof in a product category. Store brands have generated a great deal of interest in the marketing literature. Although a number of studies have analyzed various issues related to store brand introduction for retailers, these studies aggregate products across the product line and hence abstract away from studying a very important retailer pricing strategy, the practice of offering quantity discounts across different package sizes of a product. It is well known that retailers carry a menu of product sizes, and offer these otherwise identical products at different unit prices (i.e. quantity discounts) with the aim of increasing their profits. Drawing on the recent new empirical industrial organization (NEIO) methodology, we develop a structural model of demand and supply in this study to examine the impact of store brand entry on the quantity discounts and retailer profitability in a product category. We also examine the effect of store brand introduction on consumer welfare as it will help retailers understand the balance between maintaining category profitability along with consumer welfare.