Analysis of price competition in two-tier service systems
研究一个市场中两个私人服务提供商与一个免费公共服务提供商之间的价格竞争，分析竞争与合作对社会福利的影响，以及公共提供商的竞争优势对私人定价策略和绩效的作用。
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.