EconPapers    
Economics at your fingertips  
 

Analysis of price competition in two-tier service systems

Wuhua Chen, Zhe George Zhang and Zhongsheng Hua

Journal of the Operational Research Society, 2019, vol. 70, issue 11, 1938-1950

Abstract: This article focuses on the issue of price competition of two private service providers (SPs) in a market with a free public SP. The two private SPs, differentiated by service quality and capacity, choose the optimal prices to maximise their own profits. It has been shown that such a price competition between the private SPs in a market with a public SP reaches a pure Nash equilibrium. Such a system with both private and public SPs is called a two-tier service system. We investigate the impact on the social welfare of the two-tier service system of the competition and collaboration between the two private SPs. In addition, we also examine the impact of the public SP’s competitive advantage on customer service and the private SP’s pricing strategies and their performance. Numerical examples are presented to generate managerial insights for practitioners.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1057/jors.2015.123 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:tjorxx:v:70:y:2019:i:11:p:1938-1950

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tjor20

DOI: 10.1057/jors.2015.123

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald

More articles in Journal of the Operational Research Society from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2025-03-20
Handle: RePEc:taf:tjorxx:v:70:y:2019:i:11:p:1938-1950