Risk, discounts and the pricing of indivisible goods

J. Luis Guasch; Robert Clifford Marshall

doi:10.1016/0165-1765(85)90124-7

Risk, discounts and the pricing of indivisible goods

J. Luis Guasch, Robert Clifford Marshall

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We analyze the effect that indivisibilities have on the pricing of goods under imperfect information. We show that risk bearing arguments alone can account for the lower prices per unit of consumption or service of larger indivisible goods or size discounts. This result holds whether or not there are economies of scale in the production of larger goods.

Original language	English (US)
Pages (from-to)	43-46
Number of pages	4
Journal	Economics Letters
Volume	17
Issue number	1-2
DOIs	https://doi.org/10.1016/0165-1765(85)90124-7
State	Published - Jan 1 1985

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/0165-1765(85)90124-7

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Risk, discounts and the pricing of indivisible goods

Abstract

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