The Influence Of Social Preference On Service Provider Pricing Strategy

The behavior of the corporate who has the interests of the consumers in which we called corporate social preference.In this article,the social preference refers to the corporate pricing strategy which considers both corporate and consumers.Based on Hotelling model,we establish several different competition models which focus on market structure and heterogeneity among consumers.We find that:(1)under the situation without market leader,neither the more ethical they are,the more profitable they will be,nor the more selfish they are,the more profitable they will be.If the difference of product between duopoly service providers is relatively small and the utility of per unit product is large,it's more beneficial under the situation that one provider is ethical,another one is selfish;If the difference of product between duopoly service providers is relatively large and the utility of per unit product is small,however,it will be more profitable on the condition that they are all selfish.(2)In the situation that service provider 1 is the market leader and the unit product utility is high,if the service provider 2 social preference is small,the service provider 1 profits decrease as social preference of service provider 2 increases.If the social preference of service provider 2 is high,the profits of service provider 1 increase as social preference of service provider 2 increases.(3)under the situation with consumer heterogeneity,if the social preference of two service provider are the same,the profits of both corporate decrease as social preference increases,and the consumer heterogeneity has no influence on the effect of social preference,but if the social preference of two service provider are the different,the effect of social preference on the corporates based on consumer heterogeneity.