Analysis and Study on Pricing Game of Mobile Communication Enterprises
|Keywords||Mobile Communication Enterprises Pricing Game Hotelling Model|
As one of important cycles in marketing activities, pricing gets involved in many subjects such as management, economics, mathematics etc. Especially for the telecommunication industry in China, as it was originally a state-controlled business, the government had the jurisdiction to price the correlative telecommunication products. With the further development in Chinese market economy, the government supervision of the telecommunication industry was being reduced gradually, which the enterprises in the meantime began to gain more and more autonomy for pricing its own products. Nowadays the mobile communication market in China is a typical oligopolistic market which controlled by China Mobile, China Unicom and China Telecom. The process of pricing for oligopolistic enterprises is an obvious process with the game relationship. In order to analyze and evaluate the pricing behavior of mobile communication industry, which differentiate the prices of consuming within the same network and with different networks, to explore the relationship between different enterprises’market share, product pricing, and profits, and to identify the future development direction for mobile communication enterprises, this paper will set up a pricing game model for mobile communication enterprises which based on a classical game theory - Hotelling model. Meanwhile, this game equilibrium results are on some level of interpretation and guidance for mobile communication enterprise pricing, development and corresponding government policies.This paper first demonstrates a theory in regard to the pricing game. It will analyze the fundament of pricing game theory and elaborate the Hotelling model. Second the paper will start to introduce the pricing model of mobile communication products. Then it will follow to analyze price discrimination issues in this industry especially for differential pricing phenomenon such as consuming within the same network and with deferent networks. Due to this very phenomenon, this paper will establish a pricing game model for the mobile communication enterprise based on Hotelling model and then will come to the game result. Third the paper which bases on the game result will conduct an empirical verification. It will select China Mobile and China Unicom as research objects and analyze the process of pricing game between the two enterprices. In addition, the game result and market reality can be used to explain differential pricing behavior between consuming within the same network and with different networks under the government regulation. Finally, it will respectively give some different countermeasures and suggestions for superior enterprises and inferior enterprises based on this model.According to the theoretical and empirical research, mobile communication enterprises in the different market positions should take different development strategies and actions based on their market share. In the meantime, so as to maintain normal market competition order, pricing discrimination behavior should be gradually eliminated in the mobile communication industry.