Research On A Correlation Model For A Bankcard Network's Price Structure And Bankcard Consumption

The correlation problem between the price structure and bankcard consumption is becoming a very important theoretical issue in the field of electronic payments. This research deals with difficult points in the two-sided pricing method based on indirect network externalities, and the understanding about the dynamic correlation between the price structure and bankcard consumption. The core purpose of the research is to realize the long-term whole development of the networks by coordinating the price structure and bankcard consumption. Whether this purpose can be realized depends ultimately on whether the two-sided price structure pushes the positive feedback effects of the network system.In order to make the correlation rules known, a compound decision model and a correlation simulation model are constructed, introducing the two-sided market theory, general compound decision method, and Systems Dynamics. Based on service design and management theory, pricing theory, and consumer behavior theory, the models are applied to examine their validity. The main contents are as follows:(1) Research on the fundamental theories which are the basis of the models constructed. The structural characteristics and the complexity of the bankcard networks are first analyzed. Then the price structure is defined, the non-neutral conditions of the price structure are discussed, and the factors affecting the price structure are researched. Moreover, the bankcard consumption is defined as a kind of compound service product and its formative conditions are deeply analyzed to establish a theoretical platform for the model construction.(2) Research on the compound decision model of the price structure and bankcard consumption.Three sub-models of the consumers' cardholding consumption decision, the merchants' acceptance of bankcard consumption decision, and the compound decision of the service sub-system's price structure (the last for three different purposes) are constructed first by dividing the network system into two parts. Then, a compound decision model is constructed using the main line of the static correlation problem between the price structure and bankcard consumption. Finally, an improved Particle Swarm Optimization algorithm gives the optimal solution by adding a disturbed factor, adopting double fitness value and keeping some unsuitable solutions near the boundary.(3) Research on the simulation model of the price structure and bankcard consumption correlation. The level variables and the flow variables are chosen to describe the behaviors ofthe network operator, the issuer, the acquirer, the consumers, and the merchants. Then the System Dynamics model is constructed and analyzed. Further, the dynamic correlation mechanism is researched by the model constructed.(4) Research on the application of the correlation models. To resolve three important issues of the China UnionPay Network, the compound decision model and the simulation model are researched and applied. The results of the applications give some countermeasures and suggestions for the development of the China UnionPay Network.This paper contributes by exploring the bottleneck problem of the bankcard consumption pricing (which constrains the development of the bankcard networks) by forming a new research method, by widening the application fields of the two-sided market theory, by improving the capability of the service management theory to solve the dynamic problems. The research will have brilliant future applications in the fields of electronic commrce and payment management.