Cooperation or Non-Cooperation: A Bargaining Game Model Between Mobile Operator and Financial Institution in Mobile Payment Market

With the growing prevalence of the electronic commerce and the widespread use of mobile Internet and mobile payment, a new type of channel is emerging, called mobile commerce, or m-commerce. Mobile payment business has become the key of mobile value-added business. The major players in the MOBILE PAYMENT MARKET are carrying on an intensive competition to grab market share to maximize profits. In this paper, the game between MOBILE OPERATOR s and FINANCIAL INSTITUTION is studied on the basis of Nash Bargaining GAME THEORY. We propose a game theoretical framework that will help the MOBILE OPERATOR s and the FINANCIAL INSTITUTION to determine the optimal strategy to cooperation or non cooperation. Then, the influences of cooperation costs and betrayal incomes in the cooperation strategies between the parties are analyzed. The result shows that the cooperation of both sides has a negative relation with the cooperation costs and betrayal income; with the increase of cooperation costs and betrayal incomes, the parties will not be willing to cooperative.

Journal Articles