The Game Analysis on the Asymmetrical Competition between UnionPay and Allinpay & Open-Union

Abstract

This paper considers Allinpay & Open-union as the potential entrant bank card organizations, and builds two Game models which are Cournot model and Stackelberg model to analyze the asymmetrical competition between Union Pay and Allinpay & Open-union. From the analysis, this paper gives follow conclusions: (1) The first-mover advantage makes Union Pay to decide the equilibrium output and gain the maximum profit; (2) Union Pay as the incumbent bank card organization will announce a big production to prevent Allinpay & Open-union from accessing to markets. Therefore, Allinpay & Open-union should take to the rapid establishment of networks to successfully enter the market.