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On the Competitive Mechanism Concerning the Third-Party Transaction in Chinese Market

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Listed:
  • Chen Shaogang
  • Jing Yanfei

    (School of Mathematical Sciences, University of Electronic Science and Technology of China, Chengdu, 611731, China)

  • Chen Xianle

    (University of Nottingham, University Park Campus, Nottingham, United Kingdom NG7 2RD, China)

Abstract

This paper seeks to position the third-party transaction (TPT) in the macrostructure of Chinese market in terms of Concentration Ratio and Herfindahl-Hirschman Index. By extending both Cournot oligopolistic and Stackelberg oligopolistic competition models, a new oligopolistic competition model is established for China’s TPT market. Based on multidimensional game, a pricing game model is theorized accordingly to elucidate the TPT platform. The influence of various factors on the price of the TPT platform is verified with numerical simulation. The formation of monopoly is an inevitable consequence of the “one superpower and multi powers” market structure given the unregulated development of TPT enterprises as the prerequisite. In addition, through the studies on telecom payment market, such unregulated development can also cause the “big-three” domination for the TPT enterprises in the “multi powers” market structure. Based on our modelizations, this paper serves to provide prospect recommendations for policy-making of state supervision authorities.

Suggested Citation

  • Chen Shaogang & Jing Yanfei & Chen Xianle, 2020. "On the Competitive Mechanism Concerning the Third-Party Transaction in Chinese Market," Journal of Systems Science and Information, De Gruyter, vol. 8(1), pages 33-52, February.
    • Handle: RePEc:bpj:jossai:v:8:y:2020:i:1:p:33-52:n:3
    DOI: 10.21078/JSSI-2020-033-20
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    References listed on IDEAS

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