Game Analysis Of Price Competition Between Online Car-hailing Platform And Traditional Taxi Company

With today's "Internet +" economy sweeping the world,the sharing economy has developed vigorously,and a series of goods and service sharing modes such as Airbnb(house leasing),Uber(car rental service)and Eatwith(food sharing)continue to emerge.On the one hand,these sharing modes enlighten and lead the development of the global sharing economy,on the other hand,they form a competitive situation with traditional incumbent enterprises.Therefore,the influence of the sharing economy platform on the traditional incumbent enterprises has become an important research issue.The implications of the existing literature on the sharing economy are still evolving,and there is also debate among scholars about the mode of the sharing economy.Further,some scholars explored the design of the sharing economy platform and the relationship between the sharing economy platform and the traditional incumbent enterprises,but these studies have not considered the negatively supply externalities of the service providers of the online car-hailing platform and the after-service responsibility(security accident)sharing between the online car-hailing platform and the service provider.Based on the negatively supply externalities of the platform service providers and the after-service responsibility(security accident)sharing between the online car-hailing platform and the service provider,this paper establishes a two-stage game model between the online car-hailing platform and the traditional taxi company,and analyzes their strategic interaction,their competitive advantages and disadvantages and the implications of management based on the competition equilibrium.In order to investigate the competition behavior between the online car-hailing platform and the traditional taxi company,we establish and solve a two-stage competition game model with these two companies.In the first stage,the online car-hailing platform and taxi company simultaneously(respectively)decide to charge the service price to the demanding party;In the second stage,the online car-hailing platform organizes the service supply by paying the reward price to the service provider(private car driver).The main findings are as follows.(1)The equilibrium profit of the online car-hailing platform(taxi company)increases(decreases)as the unit service cost of the taxi company increases(decreases),increases(decreases)as the number of idle resources increases(decreases).However,the impact of the opportunity cost andnegatively supply externalities of the platform service providers on the profitability of the two companies depends on the substitution degree between the service needs of the two.When the substitution degree is higher(lower),the profitability of the two companies will increase(reduce)as the opportunity cost and the negatively supply externalities of the platform service providers increase.(2)Relative to the online car-hailing platform,the taxi company's market share becomes smaller(larger)with higher(lower)unit service cost of the taxi company,more(fewer)idle resources,lower(higher)opportunity cost of the service providers and lower(higher)negatively supply externalities of the platform service providers.(3)Given other parameters,the fully high(low)unit service cost of the taxi company implies a lower(higher)profitability of the taxi company,but for the medium unit service cost,the profitability between the two companies cannot be compared.(4)If there existing the after-service responsibility(security accident)sharing between the online car-hailing platform and the service provider,when the taxi company's unit service cost is high(low),the equilibrium profit of the two companies will increase(decrease)as the expected cost of the after-service responsibility(security accident)sharing belonged to the online car-hailing platform.(5)If there existing the after-service responsibility(security accident)sharing between the online car-hailing platform and the service provider,relative to the platform,the taxi company's market share becomes larger(smaller)with the higher(lower)responsibility level of the platform.It should be noted that the results in(1)-(3)are still valid in nature even though the after-service responsibility(security accident)sharing between the online car-hailing platform and the service provider has existed and some critical conditions have changed.The main contributions and innovation of this paper are as follows.On the basis of introducing the negatively supply externalities of the platform service providers and the after-service responsibility(security accident)sharing between the online car-hailing platform and the service provider,we depict the strategic behavior between the platform service providers and reveal the impact of the negatively supply externalities and the after-service responsibility(security accident)sharing on the competitive advantages and disadvantages of the two companies based on the competition equilibrium.