Study on the complexity pricing game and coordination of the duopoly air conditioner market with disturbance demand

The paper focuses on the dynamic pricing game of the duopoly air conditioner market with disturbance in demand and analyzes the influence of disturbance on the dynamic game system. Considering the demand for products, such as air conditioner, varies with different seasons, we assume three cases based on the condition of disturbance, including growth market (Case 1), decliningmarket (Case 2) and completely randommarket (Case 3). By analyzing these three cases and making comparison among them, the paper shows that the growth market is more sensitive to the changing parameters such as the adjustment variable and the competitive factor than the declining market. It is more difficult to keep the system stable in a growth market. Although the demand is completely random, the dynamic system can reach a stable state, on condition that the adjustment variable is small enough. The results also indicate that the bullwhip effect between the order quantity and the actual demand is weakened gradually along with the price adjustment. © 2015 Elsevier B.V. All rights reserved.