Volume 30, No 1, 2023, P. 5-27

UDC 519.83
V. V. Gusev
Pure Nash equilibrium in a two-step pricing game: Covering sell points in a tourist city

Abstract:
The economy of small tourist towns has unique characteristics. Basically, small business in such towns is aimed at meeting tourists’ needs. The competition between entrepreneurs engaged in service provision makes the pricing problem relevant. Some entrepreneurs need to define their goods value and decide where to sell them. If an entrepreneur often changes the sell point due to the competition, he may lose the profit. An interesting case is when the sell point choice is based on pure strategies. By the concept of congestion games with player-specific payoff functions and ordinal potential functions, the paper demonstrates the pricing game equilibrium under inherent restrictions. An equilibrium distribution of individual entrepreneurs by sell points in Gelendzhik is found.
Tab. 3, illustr. 2, bibliogr. 22.

Keywords: game theory, pure Nash equilibrium, pricing game, potential games.

DOI: 10.33048/daio.2023.30.744

Vasily V. Gusev ¹
1. HSE University,
3 Kantemirovskaya Street, 194100 St. Petersburg, Russia
e-mail: vgusev@hse.ru

Received June 3, 2022
Revised June 23, 2022
Accepted June 29, 2022

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