Analysis on Third-Degree Price Discrimination in Oligopoly Market Based on Static Game Theory

Abstract:

Equilibrium production, equilibrium price and equilibrium total revenue in the case of implementing third-degree price discrimination and unified pricing were analyzed under the condition of two oligopoly firms with 2 sub markets by complete information static game method, and the relationship between the three indexes of the two cases were studied. The results showed that, under the condition of linear demand functions of the two sub markets, the equilibrium output of unified pricing was equal to the equilibrium output of discriminative pricing; the equilibrium price of unified pricing was weighted average of the equilibrium prices of two sub markets while discriminative pricing; the equilibrium total revenue of unified pricing was less than the equilibrium total revenue of discriminative pricing.

• Periodical: Advanced Materials Research (Volumes 912-914)
• Pages: 1865-1873
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.912-914.1865
• Online since: April 2014
• Authors: Xing You Gao*
• Keywords: Complete Information Static Game, Cournot Model, Oligopoly Market, Third-Degree Price Discrimination

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