Why quantity premia are rare?

Sergey Kokovin, Babu Nahata and Evgeny Zhelobodko

Economics Letters, 2008, vol. 100, issue 1, pages 153-156

Abstract: Using linear demands for two types of consumers, this note shows why discounts are ubiquitous and premia are rare. By observing premia, one can infer that the package sold at premium is undistorted and the single-crossing condition must hold.

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