
CAPACITY SHARING STRATEGY WITH SUSTAINABLE REVENUE-SHARING CONTRACTS
Author(s) -
Junlong Chen,
Shi Jia-yan,
Jiali Liu
Publication year - 2021
Publication title -
technological and economic development of economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.634
H-Index - 47
eISSN - 2029-4921
pISSN - 2029-4913
DOI - 10.3846/tede.2021.16030
Subject(s) - revenue sharing , revenue , business , industrial organization , tariff , cost sharing , marginal cost , marginal revenue , duopoly , microeconomics , sustainable development , environmental economics , economics , finance , cournot competition , international trade , political science , law
This paper develops a duopoly model to analyse capacity sharing strategy and the optimal revenue-sharing contract under a two-part tariff and examines the effects of capacity sharing, cost, and sharing charges in three scenarios. The paper uses the two-part tariff method and adds a more realistic assumption of incremental marginal costs to improve the research on capacity sharing strategies. The results show that capacity constraints affect the sustainable development of firms. A sustainable revenue-sharing contract can create a win-win situation for both firms and promote capacity sharing. Capacity sharing, cost, and the revenue-sharing rate have different impacts in different scenarios; the optimal revenue-sharing rate and fixed fee can be determined to maximise the profits of firms that share capacity. However, capacity sharing may not improve social welfare.