Oligopoly Equilibrium of Price Competition Game with Elastic Utility in General Networks

Abstract:

This paper presents a study of the price competition game among multiple service providers in a general network with elastic utility.The paper also presents the definition of a user equilibrium and the oligopoly equilibrium as the equilibrium prices set by the service provider and the corresponding user equilibrium.For a given price,a characterization of the user equilibrium of flow rates is elaborated under the Wardrop assumption.Furthermore,the oligopoly equilibrium is explicitly characterized,and its performance relative to the social optimum is studied.The study results show that the aggregate flow allocations at the oligopoly equilibrium are always less than and equal to the social equilibrium for each origindestination(OD) pair.