MARK3082 Lecture Notes - Lecture 3: Third Order, Bertrand Competition, Non-Cooperative Game Theory
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Customers have different willingness-to-pay (wtp: taste/preference, attribute performance, usage rate, category knowledge experts vs novice. Wtp: consumer a: , consumer b: . Wtp: consumer a: /1; /2 (need at most 2 packages, consumer b: (need only 1 package) 2nd degree price discrimination: charges a different price based on quantity sold. 3rd degree price discrimination: charges a different price based on location of customer segment. Aggregate demand 1 for students (group 1): q1 = 100 p1. Aggregate demand 2 for others (group 2): q2 = 150 0. 5p2. From the above equation, we can say that. Students are more price sensitive because the coefficient is 1. (cid:862)othe(cid:396)s(cid:863) a(cid:396)e a la(cid:396)ge(cid:396) g(cid:396)oup from 150 intercept. Revenue from group 1: r1 = (100 q1) * q1. Revenue from group 2: r2 = 2(150 q2) * q2. Total profits = revenue(group 1) + revenue(group 2) tc. = [(100 q1) * q1] + [2(150 q2) * q2] [100 +
