Research On The Game Model And Simulation Of Bankcard Networks' Competition

As a micro-amount financial payment instrument, bankcard has been accepted and loved by an increasing number of consumers. With rapid development and maturation, bankcard industry has played an more important role in financial payment and supervision for each country and region. Oligarchy monopoly in international bankcard market has been formed, and the competition between networks is increasingly intensified, which also becomes a considerable research field.This paper constructs an asymmetrical duopoly competition model for bankcard networks, in order to resolve the question of consumer choice based on the utility of product differentiation, and analyzes the impact of the asymmetric network externalities and compatibilities on market equilibrium. Besides, A simulation tool is used to refine influence factors, and analyzes the relationship between these factors, in order to reveal the competition rules and development trends. Main contents of this paper are as follows:Analyze the economic characteristics of bankcard networks, and the impact of these characteristics on the bankcard network competition. Given to the industry history and present situation, the research framework is constructed and the game theory is selected.Build the competition model of product differentiation based on competition analysis, and separate network externalities and compatibilities from the big concept of product differentiation through an externality-utility function to consider the impact separately. After using Bertrand-Stacelberg game theory to get the market equilibrium, compare and analyze the impact of the asymmetric externalities on market equilibrium statically.On the basis of static analysis, the process of network competition for consumers has been simulated dynamically. Refining the classification of network externalities, further more considering the different generation mechanism and the action way of direct and indirect externalities, the dynamical association between externalities and compatibilities, and the impact of these factors and relationships on competition, all above have been doen to reveal the competition trend and the action law. By comparing the outputs with the real ones, the simulation model has been verified.Different competition strategies have been simulated by varying parameters of the simulation model, and the impact also been analyzed. In particular, the simulation of each side using different strategy to establish a competitive advantage or reacting to that of its rival, could be a more realistic description for the two-side competition and provide a theoretical basis for the competition decision.The research studies product differentiation competition of asymmetric duopoly bankcard networks, and provides references for future studies, which is in conformity with the research needs of multi-network platform competition in real-world. Because of taking into account the influences of network externalities and compatibilities, even their relationships, a basis for more accurate qualitative further study has been provided. Besides, the method of applying simulation tools of system dynamics could be a good indication for similar studies.