IDEAS home Printed from https://ideas.repec.org/a/taf/tjorxx/v70y2019i11p1938-1950.html
   My bibliography  Save this article

Analysis of price competition in two-tier service systems

Author

Listed:
  • Wuhua Chen
  • Zhe George Zhang
  • Zhongsheng Hua

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.

Suggested Citation

  • Wuhua Chen & Zhe George Zhang & Zhongsheng Hua, 2019. "Analysis of price competition in two-tier service systems," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 70(11), pages 1938-1950, November.
  • Handle: RePEc:taf:tjorxx:v:70:y:2019:i:11:p:1938-1950
    DOI: 10.1057/jors.2015.123
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1057/jors.2015.123
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1057/jors.2015.123?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:tjorxx:v:70:y:2019:i:11:p:1938-1950. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/tjor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.