Pricing of Public-Utilities-Products under Positive Externalities

Abstract

The paper studied on the pricing policy under positive externalities, focusing on the Chinese public utilities products. After analysis, referred to the models of Yang J [1] and Sundararajan [2], they focused on positive externality network products’ customizing bundled pricing. What the difference is, they focused on network products, researching on the bundled pricing model under positive externality. This paper, however, is facing public utilities products, and the customized product bundling pricing models under positive externalities are given. In addition, it discusses the optimal-realizable-customized-bundling-pricing contracts for the monopoly companies under the situation of positive externalities existing.