A Multiproduct Duopolistic Pricing Model in Network Convergence

In order to solve the multiproduct pricing problem of telecommunication operators in network convergence, a duopolistic model is used in this paper. We introduce a two dimensional Bertrand duopoly game model to discuss multiproduct pricing problem in the case that two operators offer two kind of alternative products who have full overlay networks, and consider the impact of network externalities on pricing. Our research shows that multi-product operators who jointly consider the multi-product pricing will earn more than separately considering the single market during the course of making pricing decisions, especially when network externalities exist. Taking network externalities into account, the two dimensional Bertrand model can effectively solve the multiproduct pricing problem in network convergence, which provides a theoretical basis for telecommunication operators to make multiproduct pricing decisions.