Industrial Engineering Journal ›› 2020, Vol. 23 ›› Issue (4): 93-96,139.doi: 10.3969/j.issn.1007-7375.2020.04.012

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Oligarch Pricing in Spoke Model with Consumer Preference

TAN Meirong1, LI Hao2   

  1. 1. School of Economics, Rongzhi College of Chongqing Technology and Business University, Chongqing 401320, China;
    2. School of Economics and Management, Chongqing Jiaotong University, Chongqing 400074, China
  • Received:2019-04-17 Published:2020-08-21

Abstract: The oligopolistic pricing game considering consumer preference from the consumer's purchasing behavior is studied. A spoke model is built based on the Hotelling model, and then through mathematical derivation, the optimal pricing of firms is obtained under different purchase intentions. The following conclusions are drawn: when the consumers are less willing to buy, the market is in a regional monopoly; when the consumers are willing to buy, the market is in a non-regional monopoly. The results of the theoretical analysis are verified by numerical examples. At the same time, it is found that whether the market is in regional monopoly competition or in non-regional monopoly competition, the consumer's purchase intention is positively correlated with the expected revenue of firms.

Key words: consumer preference, spoke model, pricing

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