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Competition pricing between domestic and foreign manufacturers: a bi-level model using a novel hybrid method
Sādhanā ( IF 1.4 ) Pub Date : 2021-05-29 , DOI: 10.1007/s12046-021-01627-y
SEYED PARSA PARVASI , ATA ALLAH TALEIZADEH

Nowadays, due to globalization, many domestic manufacturers have gone bankrupt after foreign manufacturers’ products entering their market. Obviously, pricing on products plays a crucial role in maintaining the market share and profit of the domestic manufacturers. In this paper, a Stackelberg game using the bi-level programming model approach is presented in order to analyze a pricing problem in which two manufacturers, one foreign and one domestic, compete. The domestic and foreign manufacturers sell their products in a competitive environment considering three different market segments, respectively with high, medium and low income levels of customers. Also, the domestic manufacturer plays the role as the game leader and foreign manufacturer the follower. In this problem, mill price and quality of product are considered as effective factors on customers’ utility in each market. Furthermore, the customers’ buying tendency from each manufacturer in each market is captured by the multinomial logit model. To solve the proposed model, a hybrid method based on Lambert-W function and Path-Following method has been used. Then, in order to investigate the domestic manufacturer’s profit versus the foreign manufacturer’s profit, the optimal prices of manufacturers are calculated by using different instances, based on product’s price and product’s quality of each manufacturer. Finally, the results conclude that the market segmentation with respect to the income levels leads to an increase in the profit of the domestic manufacturer. The proposed method can improve the competitive advantage of the domestic manufacturer vis-à-vis the foreign manufacturer.



中文翻译:

国内外厂商竞争定价:一种使用新型混合方法的双层模型

如今,由于全球化,许多国内制造商在外国制造商的产品进入其市场后破产。显然,产品定价对于保持国内厂商的市场份额和利润起着至关重要的作用。在本文中,提出了使用双层规划模型方法的 Stackelberg 博弈,以分析两个制造商(一家国外和一家国内)竞争的定价问题。国内外制造商在竞争环境中销售他们的产品,考虑三个不同的细分市场,分别具有高、中和低收入水平的客户。此外,国内厂商是游戏的领头羊,国外厂商是跟风。在这个问题上 工厂的价格和产品质量被认为是影响每个市场客户效用的有效因素。此外,多项 logit 模型可以捕获每个市场中每个制造商的客户购买趋势。为了解决所提出的模型,使用了基于 Lambert-W 函数和路径跟随方法的混合方法。然后,为了考察国内制造商的利润与国外制造商的利润,根据每个制造商的产品价格和产品质量,使用不同的实例计算制造商的最优价格。最后,结果得出结论,关于收入水平的市场细分导致国内制造商的利润增加。

更新日期:2021-05-30
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