Game on the Tacit Collusion of the Telecom Market Under the Full-Business Operating Environment

Abstract

This paper constructs the single-stage game model and the infinite repeated game model to analyze the conditions of the tacit collusion of the telecommunication market under the full-business operation environment. The results show that the Nash equilibrium of single-stage game is: (betrayal, betrayal); in the repeated game, when the discount factor $\updelta > \frac{73}{81}$, the profit of the tacit collusion among telecom operators is greater than the profit that they can obtain by betraying each other, so the telecom operators will choose the tacit collusion to obtain high monopoly profits. Therefore, the regulatory agencies should choose the appropriate regulatory methods according to the operator’s production cost differences and discount factor, which prevents telecom operators from colluding and raising price, urges operators to strengthen technological innovation, improves the quality of telecom products, and creates an orderly competitive telecom market.