Pricing behaviors on networks: some general results for two-way networks (Q5959050)

The authors study monopolistic pricing behavior within a two-way network. A set of activities is considered (the set of vertices) which are linked together in a network which results in possibly more than one travel from some origin to some destination. Each vertex \(i\) is identified with a decision centre. At the origin of a travel each decision centre takes two decisions which affect the demand for travels and also charge a margin to the cost. But the cost of a decsion centre includes also the money charged by intermediate decision centres which intervene in the production of the same composite good. Thus in the underlying game, each final seller affects the customer to the different roads by his/her first decision and in the second decision plays a Nash equilibrium in the margins. The subgame perfect equilibria of this game are studied in this paper and general results on the existence and uniqueness are presented.