Pricing Strategies for Mobile Service Products with Vertical Differentiation

Xiaoli Chong, Jinlong Zhang, Weizhou Wang, Yuchen Wang

Abstract: This paper introduces the quality of service products and network externalities intensity coefficient into consumer utility function, and analyzes the impact on market share and profits in incomplete market coverage of a duopolistic marketing with the difference of network externalities and quality of products. It's shown that the profits increased neither depend on the network externalities nor quality of products, but depends on the marketing strategy of the service products. Different quality of service products in the market competition has its own advantages.