PRICE DISCRIMINATION IN A FORM OF DISCOUNTS: CATEGORIZATION AND IMPACT ON COMPETITION
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Keywords

competition
price discrimination
discounts
antitrust

How to Cite

Cherednichenko, D. (2021). PRICE DISCRIMINATION IN A FORM OF DISCOUNTS: CATEGORIZATION AND IMPACT ON COMPETITION. Modern Management Review, 26(4), 25-35. https://doi.org/10.7862/rz.2021.mmr.22

Abstract

This paper is aimed to clarify the definition and categorization of discounts as well as pro- and anticompetitive effects of discounts. The author applied qualitative methods to the research. The modern literature review unfolds the gap of proper discounts definition, which is proposed to be covered by five-dimensions approach to discounts categorization. Based on such aspects of discount scheme as time, product, threshold, distribution level and customer, the approach provides comprehensive and uniform characteristics of discount. It allows assessing effects of competition, which are classified in two groups. Pro-competitive effects include stimulation of demand, decreasing cost due to economy of scale, solving coordination problems within a supply chain. Anti-competitive effects encompass predation scheme, raising rival’s cost, exclusive dealing, leverage and exclusionary bundling. The importance of correct assessment of the discounts by antitrust authorities is high as an overenforcement in this sphere may lead to adverse effect on total welfare.

https://doi.org/10.7862/rz.2021.mmr.22
pdf

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All texts published in the Journal "Modern Management Review" are available in the full version on the website of MMR. Digital IDs have also been entered from number 19 (3/2012) (DOI: 10.7862/rz.2018.mmr.1)

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