2014Journal of Guangdong University of Petrochemical TechnologyRequires access

Nash Equilibrium of Third-Degree Price Discrimination under the Condition of n Enterprises with 2 Sub Markets

Gao Xing-yo

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Abstract

Equilibrium output,equilibrium price and equilibrium total revenue in the case of implementing third-degree price discrimination and unified pricing were analyzed under the condition of n enterprises 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 2 sub markets while discriminative pricing; the equilibrium total revenue of unified pricing was less than the equilibrium total revenue of discriminative pricing.

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Equilibrium output,equilibrium price and equilibrium total revenue in the case of implementing third-degree price discrimination and unified pricing were analyzed under the condition of n enterprises 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 2 sub markets while discriminative pricing; the equilibrium total revenue of unified pricing was less than the equilibrium total revenue of discriminative pricing.

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Available abstract

Equilibrium output,equilibrium price and equilibrium total revenue in the case of implementing third-degree price discrimination and unified pricing were analyzed under the condition of n enterprises 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 2 sub markets while discriminative pricing; the equilibrium total revenue of unified pricing was less than the equilibrium total revenue of discriminative pricing.

Key concepts: Nash equilibrium, Economics, Pricing schedule, Price discrimination, Revenue, Partial equilibrium, Microeconomics, Symmetric equilibrium

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