Abstract
In order to realize the sustainable development of the communication industry, many banks have developed some new projects to provide loan to the mobile phone brand companies (MPBCs). This paper studies a perfect information game among three parties: telecom operator (TO), MPBC, and bank. In the first stage, the bank decides an interest rate and shows it to the TO and the competitive MPBC. In the second stage, the TO and MPBC are engaged in Cournot games: a simultaneous subgame, a TO-as-leader sequential subgame, and an MPBC-as-leader sequential subgame. The TO’s and the MPBC’s decisions and the production/sale quantities are investigated. The impacts of the interest rate and the substitute factor on the TO’s and the MPBC’s optimal decisions are analyzed. When the substitute factor is high, at a low interest rate, the total sales in the simultaneous subgame is higher than those in the other two subgames; at a high interest rate, the total sales in the MPBC-as-leader subgame is higher than those in the other two subgames. However, when the substitute factor is low, at a low enough interest rate, the total sales in the simultaneous subgame is higher than those in the other two subgames; at a high enough interest rate, the total sales in the MPBC-as-leader subgame is higher than those in the other two subgames; at a moderate interest rate, the total sales in the TO-as-leader subgame is higher than those in the other two subgames. Besides, the optimal interest rate of the bank is investigated and the impact of the substitute factor on the optimal interest rate is analyzed. The bank sets a higher interest rate in the MPBC-as-leader subgame than those in the other two subgames. Besides, when the substitute factor is low, the bank sets a lower interest rate in the TO-as-leader subgame than that in the simultaneous subgame; however, when the substitute factor is high, the bank sets a higher interest rate in the TO-as-leader subgame than that in the simultaneous subgame.
Highlights
In order to increase market share and realize the sustainable development of the TOs, more and more TOs start the customized-phone business and launch a wide range of customized packages, in which telecom operators purchase cell phones from the mobile phone brand companies (MPBCs), and the phones can only fit in their own network modes, such as GSM (Global System for Mobile Communications) and CDMA (Code Division Multiple Access)
In order to realize the sustainable development of the communication industry, and many banks have developed some projects to provide loan to the MPBCs, such as “Helidai” is provided by Shanghai Pudong Development Bank
We study a perfect information game among three parties: the bank, the TO, and the competitive MPBC
Summary
In order to realize the sustainable development of the communication industry, many banks have developed some new projects to provide loan to the mobile phone brand companies (MPBCs). is paper studies a perfect information game among three parties: telecom operator (TO), MPBC, and bank. E impacts of the interest rate and the substitute factor on the TO’s and the MPBC’s optimal decisions are analyzed. When the substitute factor is high, at a low interest rate, the total sales in the simultaneous subgame is higher than those in the other two subgames; at a high interest rate, the total sales in the MPBC-as-leader subgame is higher than those in the other two subgames. The optimal interest rate of the bank is investigated and the impact of the substitute factor on the optimal interest rate is analyzed. When the substitute factor is low, the bank sets a lower interest rate in the TO-as-leader subgame than that in the simultaneous subgame; when the substitute factor is high, the bank sets a higher interest rate in the TO-as-leader subgame than that in the simultaneous subgame
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