Game-theoretical model of service quality indicators choice: Mobile service market

Margarita A. Gladkova and Nikolay A. Zenkevich Graduate School of Management, St. Petersburg State University, Volkhovsky Per. 3 St. Petersburg, 1 !!", #ussia $enkevich%gsom.&u.ru gladkova%gsom.&u.ru Keywords: 'uality evaluation, 'uality measurement, consumer(s taste for 'uality, 'uality choice, t)o*stage game, +ash e'uilibrium, Stakelberg e'uilibrium, Pareto*o&timal solution, o&timal 'uality differentiation, inde, of consumers- satisfaction. .n the &a&er a game*theoretical model of 'uality choice under com&etition is suggested. /he game*theoretical model is &resented as a t)o*stage game )here com&anies com&ete on an industrial market and consumer(s taste to 'uality is non*uniformly distributed. 0rom a &ractical &ers&ective, the aim of the &a&er is to check the validity of the suggested game*theoretical model. /hus, t)o firms are assumed to &roduce homogeneous service differentiated by 'uality on some industrial market. /he game consists of the follo)ing t)o stages1 1. 2t the first stage com&anies simultaneously define 'uality level3 4. 2t the second stage they choose service &rices. 2t this stage both simultaneous and se'uential choices are analy$ed. 5ach consumer buys at most one unit of the service. 6onsumers differ in their )illingness to &ay for 'uality level s, )hich is described by the &arameter [ !, b] . /his &arameter is called 7taste for 'uality8. /he utility of a consumer )ith a )illingness to &ay for 'uality )hen buying a service of 'uality s at a &rice p is e'ual to1
s p, U : p9 = !, p s p > s .

/he investigated industrial market is considered to be &artially covered. ;esides, in our model the case )hen taste for 'uality &arameter is non*uniformly distributed over the interval

[!, b] , namely the triangular distribution is investigated.

/he &ayoff function of the firm i )hich &roduces the service of 'uality si , )here
si = s, s < ,

is the follo)ing1
Ri : p1 , p 4 , s1 , s 4 9 = pi : s1 , s 4 9 Di : p1 , p 4 , s1 , s 4 9 , i =1,4 ,

)here Di : p1 , p 4 , s1 , s 4 9 the demand function for the service of 'uality si , )hich is s&ecified.

/he +ash e'uilibrium in the investigated game )as obtained in the e,&licit form )hich allo)ed us to evaluate &rices, com&anies- demand and revenues in the e'uilibrium. /he &a&er includes a case study for the market of mobile o&erators in Saint*Petersburg )hich )as used to a&&rove the suggested game*theoretical a&&roach to 'uality choice. Processing an em&irical data )hich )as obtained from consumer survey let us evaluate mobile service 'uality and using the model )e can sho) the )ays of &erformance im&rovement to &roduction com&anies.
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