Firms’ Strategic Pricing and Network Externalities
Joint Authors
Source
Mathematical Problems in Engineering
Issue
Vol. 2020, Issue 2020 (31 Dec. 2020), pp.1-11, 11 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2020-02-18
Country of Publication
Egypt
No. of Pages
11
Main Subjects
Abstract EN
For the sale of a product with network externalities, a Stackelberg model involving an incumbent and an entrant is developed considering the impact of three strategic decision-making modes of the incumbent and consumers on the pricing, market share, and profit of firms.
In addition, the impact of consumers’ strategic behaviours on firms’ pricing decisions and how firms respond to strategic customers is discussed.
The results show that, in the SS (strategic firm facing strategic consumers) decision-making mode, the incumbent will implement long-term pricing and finally obtain the maximum profit, while as a follower of the incumbent, the entrant will also obtain the maximum profit in the SS mode.
In the NS (nonstrategic firm facing strategic consumers) decision-making mode, the strategy of consumers seriously weakens the decision-making behaviour of the incumbent and causes the incumbent to obtain the lowest profit, but at the same time, the competitiveness of the entrant is enhanced to a certain extent, thereby rendering its profit higher than that in the NN (nonstrategic firm facing nonstrategic consumers) decision-making mode.
American Psychological Association (APA)
Zhou, Jianheng& Xu, Rongfei. 2020. Firms’ Strategic Pricing and Network Externalities. Mathematical Problems in Engineering،Vol. 2020, no. 2020, pp.1-11.
https://search.emarefa.net/detail/BIM-1194078
Modern Language Association (MLA)
Zhou, Jianheng& Xu, Rongfei. Firms’ Strategic Pricing and Network Externalities. Mathematical Problems in Engineering No. 2020 (2020), pp.1-11.
https://search.emarefa.net/detail/BIM-1194078
American Medical Association (AMA)
Zhou, Jianheng& Xu, Rongfei. Firms’ Strategic Pricing and Network Externalities. Mathematical Problems in Engineering. 2020. Vol. 2020, no. 2020, pp.1-11.
https://search.emarefa.net/detail/BIM-1194078
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1194078