Price Competition And Profit Allocation In Whole-set Equipment Industry Under Vertical Product Differentiation

Whole-set equipment industry is an oligopoly, and there exist different degrees of vertical differences in its products. On one hand, product differentiation strategy can help oligopolistic firms obtain the non-price competitive advantages in order to mine the super-profits in certain segment markets. On the anther hand, whole-set equipment is manufactured in a multi-level assembly supply chain which is built by many suppliers producing various components and subsystems. The competition among oligopolistic firms actually does become the competition among supply chains. So when allocating profits in a supply chain, the leader must consider the non-symmetric conditions of its members caused by product differentiation. This thesis mainly focuses on the problems of oligopoly price competition and supply chain's profit allocation in whole set equipment industry under product vertical differentiation.Concretely, the main works are as follows:(1) A multi-product demand function containing quality and brand parameters is constructed based on classical demand theory; given the former demand function, a static triopoly Bertrand game, consisting of two forward vertically integrated suppliers and one independent manufacturer with four products in a two-level supply chain, is modeled; market equilibrium is obtained by applying an interactive algorithm; the influences on equilibrium prices, equilibrium quantities and equilibrium profits are displayed under varying the degrees of quality and brand differentiation by numerical simulations.(2) Considering the factors of bounded rational and incomplete information in firms' long-term strategy-making, a discrete dynamic system with three oligopolistic competitors based on the former analyzed static Bertrand model is presented using the theory of nonlinear dynamics; applying numerical simulations, the existence and stability for the equilibrium of this system is obtained and the changes of market equilibrium under varying the speed of adjustment of prices, the degrees of differentiation and the preferences of customs are observed by bifurcations diagrams, chaos attractors, Lyapunov exponent, etc.; the unwanted chaos caused by the excessive speed of adjustment of prices could be effectively controlled adopting the parameter delayed feedback control method and straight-line stabilization method. (3) Aimed on the factors of multi-level and non-symmetry in product supply chain, a non-symmetrical value with multiple coalition structures based on cooperative game theory is obtained, which could be characterized by five axioms (i.e. linearity, efficiency, dummy player, positivity and partnership); the level-by-level implementation mechanism of the value is discussed and then an applied example is given.The results indicate that:Generally raising the degree of quality differentiation may result in monopoly but raising the degree of brand differentiation may not; the increase of the speed of adjustment of prices and the quality preferences of customs can cause bifurcation and chaos to occur and thus make all firm's average profits down, so Nash equilibrium is the proper market result that everyone can receive; choosing suitable control variable and parameter, chaos control methods can maintain the chaos system to Nash equilibrium; weighted levels coalition structure value can be used to solve the profit allocation problem fairly in non-symmetric multi-level supply chain and also can be implemented level by level conveniently.